EU Constitutional Treaty: Referendum

Lord Palmer: asked Her Majesty's Government:
	Whether they have estimated the cost of holding the proposed referendum on the draft European Union constitutional treaty.

Baroness Ashton of Upholland: My Lords, the estimated cost of holding a referendum on the draft European Union constitutional treaty is in the region of £78 million, which is similar to the cost of a UK-wide general election. In addition, there would be costs arising from the Electoral Commission's expenditure on the referendum.

Lord Palmer: My Lords, I thank the Minister very much for that explicit reply. Can she confirm whether any of those costs would be met by Brussels, if it offers any money, and whether Her Majesty's Government would accept any contribution to the costs of a referendum from the Commission?

Baroness Ashton of Upholland: My Lords, as I understand it, the Department for Constitutional Affairs would make a bid to Her Majesty's Treasury for the money, which would come out of the Consolidated Fund.

Lord Waddington: My Lords, will the Minister give an assurance that, unless and until the treaty is ratified, Her Majesty's Government will oppose absolutely any action taken by the EU to take steps that would have been authorised, had the treaty been ratified, but which, without ratification, will have no legal authority? An obvious example is the appointment of Mr Solana as EU Foreign Minister. Can I have an absolute assurance that the British Government will see that he does not act as if in office? If he were to do so, he would be acting without any legal authority.

Baroness Ashton of Upholland: My Lords, without ratification, the treaty, of course, does not come into effect and the constitution does not come into effect. That is very clear.
	In the post-Council Statement of 20 June, the Prime Minister said that,
	"given the no votes in France and the Netherlands, ratification cannot succeed unless and until those votes change".—[Official Report, Commons, 20/6/05; col. 523.]
	It follows that the elements of the constitution that have not yet been agreed could not continue.

Lord Pearson of Rannoch: My Lords, they are continuing. The human rights centre in Vienna continues to set itself up and operate. Is the noble Baroness aware that there are EU troops operating under the EU flag, which can be justified only by the constitution, in the Congo? Some £7 billion a year is spent on the new satellite centre, in competition with the American GPS system. The question to which some of us have been looking for an answer in recent days is: "Do these initiatives stop, or do they continue as part of the process in which the Eurocratic elite finds itself involved?".

Baroness Ashton of Upholland: My Lords, I have read with great interest all the discussions and debates that have taken place in your Lordships' House. They kept me amused for some time last evening.
	I shall take one example. The noble Lord talked about what was happening in Vienna; I am on my way to visit colleagues in Vienna this afternoon to discuss the Fundamental Rights Agency and the work that is going on in Vienna on human rights. If the noble Lord looks carefully at the different articles in the constitution, he will see that many of the issues about which he is concerned are already part and parcel of European Union policy and action that has been taken either by the European Council or, in the context of the work that I do, by the Justice and Home Affairs Council is not necessarily directly attributable to the constitution.

Lord Goodhart: My Lords, does not the Treasury owe a considerable debt of gratitude to the French voters for saving it all that money? Given that this year is the 200th anniversary of the Battle of Trafalgar, might a suitable way of showing that gratitude be to donate a full-size replica of Nelson's column to the city of Paris?

Baroness Ashton of Upholland: My Lords, I am sure that my right honourable friends the Chancellor and the Prime Minister will note the noble Lord's suggestion with great interest. More generally, I do not think that one can put a price on democracy.

Lord Howell of Guildford: My Lords, I hope that the Minister has a nice time in Vienna this afternoon. Does she recall—I am sure that she does—the Prime Minister saying in the Sun on 13 May:
	"We don't know what is going to happen in France, but we will have a referendum on the constitution in any event—and that is a government promise"?
	Is that still a government promise? If so, if is there is a referendum on the current constitutional treaty, which side will the Government be on?

Baroness Ashton of Upholland: My Lords, I quote the Prime Minister's remarks of 20 June. He said that,
	"whatever words are used in the Council conclusions, standing the results of the French and Dutch referendums"—
	or "referenda", as I prefer—
	"the treaty cannot proceed. It is therefore sensible instead to have a period of reflection, in which the critical questions as to Europe's future direction are debated".—[Official Report, Commons, 20/6/05; col. 523.]
	I draw noble Lords' attention to the speech given by my right honourable friend the Prime Minister this morning to the European Parliament. I believe that it is available.

Lord Elton: My Lords, could the Minister return to the question asked by my noble friend Lord Waddington and tell us the legal status of the alleged diplomatic representative of the EU in Washington at present?

Baroness Ashton of Upholland: My Lords, I would need to write to the noble Lord, Lord Waddington, to clarify that precisely.

Lord Elton: Oh!

Baroness Ashton of Upholland: It is no good the noble Lord, Lord Elton, looking at me like that. The question that I was dealing with related to the cost of a referendum, which is a DCA matter. On the broader issues, I would want to seek advice from the appropriate Foreign Office Minister and from the Prime Minister's Office.

Lord Pearson of Rannoch: My Lords, do I understand the answer that the noble Baroness gave me to mean that the European project intends to continue, using existing wording in the Nice Treaty? Given the defence initiatives, including the satellite programme and the troops in the Congo, is there any possibility that Brussels hopes to root these continuing military initiatives in the words in the Maastricht Treaty,
	"which might in time lead to a common defence"?
	Are they relying on the Court to say that those words justify these actions?

Baroness Ashton of Upholland: My Lords, the noble Lord, Lord Pearson, with whom I very much enjoy our regular conversations on other issues and I am delighted is continuing to debate with me, will understand that from my perspective that is a rather wider question than I am able to answer, simply because my brief does not extend that far.
	One has to be clear that the European Union is a very important part of the future of this country in a global economy. As my right honourable friend the Prime Minister said this morning, the issue is not about the idea of the European Union, it is about modernisation and policy. This is not a debate about how to abandon Europe but how to make it do what it was set up to do— improve the lives of people, a worthy and right thing to do.

Lord Barnett: My Lords, the other day in a constructive speech the noble Lord, Lord Howell of Guildford, put 16 points for the future—I am sure that he was speaking for the whole of the Opposition. He said that any future treaties of whatever size would have to have a referendum. Does my noble friend agree with that?

Baroness Ashton of Upholland: My Lords, as I have already said, at the moment we have a period of reflection. I quote again my right honourable friend the Prime Minister who gave a very good speech this morning to the European Parliament setting out our position when we take over the presidency on 1 July. The best thing that I can recommend my noble friend and other noble Lords to do is to read that speech with great care. They will find that there are some very clear ideas of how we plan to take this forward.

Sport: Ticket Sales

Lord Faulkner of Worcester: asked Her Majesty's Government:
	Whether they plan to extend to other sports the prohibition on secondary sales of tickets which currently applies to football.

Lord Davies of Oldham: My Lords, my right honourable friend the Secretary of State for Culture, Media and Sport has agreed to look into the issue, in consultation with the Home Office and the Department of Trade and Industry, to see whether the matter warrants further government involvement.

Lord Faulkner of Worcester: My Lords, I thank my noble friend for that encouraging reply. Is he aware that, had he conducted a search on eBay last night for Ashes tickets, he would have found that 170 items came up, including Lord's test tickets with a face value of £52 being sold for more than £1,000? A very similar situation exists with regard to Wimbledon tennis tickets. Does he agree with the submission that the four major sports have made to the Secretary of State, that the activities of ticket touts—who buy large numbers of tickets, often by nefarious means—are having the effect of driving tickets beyond the reach of ordinary sports fans, who are unable to get them?

Lord Davies of Oldham: My Lords, as I indicated, the Secretary of State is exercised enough about the issue to consider it further in consultation with other departments. We received a further additional document from the four sports associations only last Friday and it will be considered thoroughly.
	Wider interests of public policy are, of course, involved in any such exercise. However, as I think my noble friend will recognise, we cannot produce an immediate response to the demand for Ashes test match tickets any more than we can produce one to the extraordinary figures quoted for Wimbledon. But we are looking at the issue with a view to the possibility of legislation. As he will know, however, the legislation which is in force applies only to segregation at football grounds.

Lord Addington: My Lords, does the Minister have any sympathy with the idea that picking out a few individual sports is a great way to keep us sitting for longer and on more occasions? However, we should ban all ticket touting. We should also extend it to events other than simply sport. For instance, the annual scrum at Glastonbury usually leads to fences collapsing. We should probably do something about such events as well.

Lord Davies of Oldham: My Lords, that point of view is certainly widely held, but as I think the noble Lord will recognise, some quite complex issues are involved here. We could not ban all secondary selling; after all, a great many theatre tickets are sold not directly at the theatre but through secondary selling. It could be argued that, in certain aspects, such sales increase the public's access to tickets. We could not, for instance, ban a situation in which someone who could not attend the theatre one evening wanted to sell on his ticket. The reasons for allowing it are obvious—it helps to guarantee that the theatre is full rather than empty.
	It is a complex issue. But I understand entirely what the noble Lord is saying about the issue covering more than just the great sporting events.

Viscount Astor: My Lords, does the Minister consider the situation satisfactory when some of those wishing to go to Wimbledon have to go there the day before and sleep overnight on the pavement in order to get a ticket?

Lord Davies of Oldham: My Lords, the demand for tickets at Wimbledon looks almost limitless. However, if it is a choice between the most extravagant pricing of tickets so that only the wealthy can go, and the most enthusiastic tennis fans being prepared to camp out on the pavement, I am in favour of the latter.

Baroness McIntosh of Hudnall: My Lords, when my noble friend reports this conversation back to the Secretary of State, will he draw her attention to the work that has been done over many years by the Society of London Theatre to manage the impact of the secondary selling of theatre tickets, to which he has already referred? There may be some useful information to be had there.

Lord Davies of Oldham: Indeed there is, my Lords. I am grateful to my noble friend for drawing that to the House's attention. It is important, for example, that people do not buy theatre tickets for seats with restricted views. Whereas the theatre box office would make such restrictions clear, the secondary seller may be under no obligation whatever to do so, thereby causing enormous unfairness. That point needs to be taken on board.

Lord Elton: My Lords, why not give the original vendor or their agents the power, if they do not already have it, to impose a contract on the purchaser stating that what they have bought is not for resale?

Lord Davies of Oldham: My Lords, the sporting associations would say that that is exactly what they do when they issue tickets. But it is extremely difficult to enforce it, which is why tickets come on to the market.

Lord Davies of Coity: My Lords, my noble friend Lord Faulkner of Worcester has rightly drawn our attention to the concern about the exorbitant prices being demanded for these tickets. As I understand it, my noble friend the Minister said that the Secretary of State is looking at the issue. I should like to ask him two questions arising from that. First, how long will that consideration take? Secondly, to what extent will the operation of the market impinge on her report?

Lord Davies of Oldham: My Lords, on my noble friend's second question, as I indicated, there are benefits from the free market. We are careful about where we put restrictions. However, noble Lords will recognise the powerful arguments for restricting ticket touting operations. On his first point, I should mention one obvious consideration. If we are successful in our bid for the Olympic Games, we would need to bring in legislation to ensure that tickets to the Games are restricted and thus not open to touting. It is a requirement of the International Olympic Committee. So of course there is an element of delay as we await that decision.

Lord Roberts of Conwy: My Lords, could not the sporting organisations make substantial ticket sales conditional upon a donation being made to the organisations concerned, so that at least they would benefit rather than the touts?

Lord Davies of Oldham: My Lords, we expect the sporting organisations to sell tickets in good faith and that the price printed on the ticket is the price that ought to be paid by the person going to the fixture. But touts get hold of some of those tickets and sell them on at escalated prices. We all want to see tickets being sold at their face value. That is the law of the land. On occasions when they are able to substantiate clearly that the public are being exploited because tickets are being traded at above the figure printed on them, trading standards officers will intervene. But of course the touts are extremely careful to ensure that the unfortunate purchaser has no idea of the original ticket price.

Bird Influenza

Lord Morris of Manchester: asked Her Majesty's Government:
	What further steps they are considering to address the threat of a bird influenza pandemic.

Baroness Royall of Blaisdon: My Lords, experts continue to monitor the risk of an influenza pandemic arising from avian influenza, which is currently circulating in south-east Asia. The Government are ensuring that we are as prepared as possible. The revised UK influenza pandemic contingency plan was published in March this year and will be kept up to date. Since the issue was last raised by the noble Lord earlier this year, the Government have announced the purchase of 14.6 million courses of antiviral drugs to treat those who become ill during a pandemic. Guidance has been issued to NHS planners.

Lord Morris of Manchester: My Lords, I am grateful to my noble friend. Is she aware that in February the head of the World Health Organisation in Asia, Dr Shigeru Omi, said the world was facing the "greatest possible danger" of an avian flu pandemic that was "already overdue"? Will she confirm that we then had only 100,000 courses of antiviral drugs—France already having bought 13 million—and that half of the order of 14.6 million courses the Department of Health announced in March will not be available until 2006–07? How many have we now and how many will we have by the end of 2005?
	Finally, is there any action open to Ministers to speed delivery, increase manufacturing capacity in the UK, or otherwise strengthen our defences against a scourge that experts have repeatedly warned could kill up to 500,000 people in this country?

Baroness Royall of Blaisdon: My Lords, I am aware of the comments made by the doctor who my noble friend mentioned. Currently we have 100,000 courses of antiviral drugs available and it is correct to say that although we have put in an order to purchase 14.6 million courses, they will not be available immediately. But I am informed that they will be available by the end of 2006 rather than 2007.
	Given my noble friend's fine record in the field of disability, he will know well the vital importance of both prevention and the minimisation of impact. That is exactly what the Government are striving to do in respect of an influenza pandemic; it is also why the contingency plan is in place, why it is continually updated and why we are buying these additional courses of antiviral treatment.

Baroness Oppenheim-Barnes: My Lords, are the Government giving any advice on what steps people should take not to catch this disease? Will they be affected by something they eat? What steps have the Government taken in terms of giving such advice?

Baroness Royall of Blaisdon: My Lords, advice of this kind is part of the contingency plan I mentioned. It is being prepared and at the moment the department deems it necessary, people will have the information to enable them to deal with a pandemic of influenza. I assure the noble Baroness that that is the case.

Baroness Masham of Ilton: My Lords, is the Minister aware that wild geese can carry the virus? Domestic fowl then get ill while the wild ones remain well. It is a complex situation, but what progress is being made on a vaccine for this condition?

Baroness Royall of Blaisdon: My Lords, I was not aware of the situation relating to geese, but I know that it is a very complex issue. On the preparations for a vaccine, the noble Baroness will know that it is not possible to produce an exact vaccine to deal with a pandemic until we know which strain of influenza is involved. I am pleased to say that we are currently tendering to buy certain vaccines which may possibly deal with a pandemic. We are taking all the necessary action, but until we know which strain of influenza is involved in a pandemic, we cannot make a decision on the most appropriate vaccine.

Baroness Barker: My Lords, on 14 June the Parliamentary Under-Secretary of State in another place said that the contingency plan would be updated and published within the next few months. When will that be done? Can she also tell us whether the department is working with the travel industry to bring to the attention of travellers to places such as China, Vietnam and Cambodia the potential risks they face in those countries from HPAI?

Baroness Royall of Blaisdon: My Lords, the noble Baroness is correct to say that the plan is being updated and that it will be published within the next few months. I regret that I cannot be more specific than that. On the part of her question relating to the travel industry, I am afraid that I do not have a specific answer either, but I shall certainly write to her and place a copy of the letter in the Library of the House.

Baroness Morgan of Drefelin: My Lords, while it is essential that we put our house in order on the domestic front, does my noble friend agree with the suggestion made by some scientists that what we need is a planned global response to avian flu if we are to avoid a catastrophe?

Baroness Royall of Blaisdon: My Lords, I agree absolutely with my noble friend. Of course we must take action in the UK, but there must also be a global response. That is why the UK is working closely with the World Health Organisation. Recently we have put additional money into the WHO towards surveillance in south-east Asia. Also, together with the US, we co-chair the Global Health Security Action Group which comprises the G7 countries and Mexico. We are working closely with the European Union and the issue is discussed at meetings of the Health Council. Moreover, noble Lords may be interested to hear that an important step is being taken at EU level; that is, the preparation of a dossier relating to a new licence for vaccines so that once the strain has been identified, the necessary licence can be granted without delay. That is an important step forward.

Lord Roberts of Conwy: My Lords, on the 14.6 million courses on order and the existing supplies, can the noble Baroness say whether these are to be stored centrally or whether there will be a regional distribution? In particular, what courses might be available in Wales?

Baroness Royall of Blaisdon: My Lords, I understand and share the noble Lord's preoccupation with Wales, but I do not know whether the antiviral drugs are going to be stored centrally or not. However, I undertake to find out and I shall notify him.

People Trafficking

Lord Roberts of Llandudno: asked Her Majesty's Government:
	What is their response to recent reports that young Africans are trafficked into the United Kingdom and subsequently go missing.

Baroness Scotland of Asthal: My Lords, initial inquiries made by the team investigating the "Adam" murder found that a number of African boys had not returned to school following the summer break in 2001. The Metropolitan Police has stated clearly that it has no evidence that any of these boys have come to any harm. There were no allegations from either families or schools that the welfare of these children was at risk.

Lord Roberts of Llandudno: My Lords, I know that the Minister shares my concern that if the allegations we have read in the newspapers or heard on radio programmes are correct, this is probably the most terrible act ever against children in the history of the United Kingdom. Will the Minister now thoroughly investigate this situation with all agencies, organisations, and Churches and report back to this House? Secondly, are Her Majesty's Government in continuous dialogue with the countries from which these children come?

Baroness Scotland of Asthal: My Lords, the noble Lord is absolutely right. I do share his passion and concern for issues which involve abuse of children, because we all find them abhorrent. I reassure the noble Lord that these issues are being taken absolutely seriously. It was for that reason that the Metropolitan Police carried out the review that we spoke about on the most recent occasion that we discussed this issue. These matters are being pursued.
	Groups have been set up and I shall attend a meeting today with my honourable friend in another place, the Minister for Children, to discuss some of the matters that we could do together in that regard. I can assure the noble Lord that everything is being done to pursue this matter with appropriate vigour.

Viscount Bridgeman: My Lords, how many successful prosecutions have been brought for trafficking under the Sexual Offences Act 2003 and the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004?

Baroness Scotland of Asthal: My Lords, I do not have those figures in relation to trafficking. Noble Lords will know that we changed the law to make such prosecutions easier and I assure noble Lords that prosecutions and the approaches taken by the authorities are appropriately vigorous. I shall write to the noble Lord in relation to the figures, if we have any.

Lord Elton: My Lords, what means of identifying trafficked children exist if they do not register at any school?

Baroness Scotland of Asthal: My Lords, if issues are raised in relation to any unaccompanied children who come into this country, those matters are pursued. We also respond to any information we receive. Noble Lords will know the work that Project Reflex carries out in terms of both women and children. So there is intelligence that we follow up. These issues are extremely important and it is right that this House has raised the issue of trafficked children on a number of occasions and, indeed, trafficking generally, particularly in relation to vulnerable women.

The Earl of Listowel: My Lords, would improved provision for private fostering enable better track to be kept of children?

Baroness Scotland of Asthal: My Lords, I know the concern that the noble Earl and others feel in relation to fostering. The noble Earl will know that in the Children Act 2004 we strengthened the notification arrangements for protecting children who are privately fostered—I assume that it is private fostering that the noble Earl is particularly concerned about. The Government believe that this will be more effective in finding out about arrangements and making appropriate checks than a bureaucratic registration scheme. We are pursuing that, but, of course, if we find that registration is necessary, the Act provides for that.

Hereditary Peers' By-Election

The Clerk of the Parliaments: My Lords, with the leave of the House, I am now able to announce the result of the by-election to elect a Cross-Bench hereditary Peer, in the place of the late Baroness Strange, in accordance with Standing Order 10.
	Twenty-eight Lords completed valid ballot papers. A paper setting out the complete results is being made available in the Printed Paper Office and the Library. That paper gives the number of votes cast for each candidate.
	The successful candidate was Viscount Montgomery of Alamein.

Business of the House: Debate this Day

Baroness Amos: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That the debate on the Motion in the name of the Lord Oxburgh set down for today shall be limited to three hours.—(Baroness Amos.)

On Question, Motion agreed to.

Euro

Lord Roper: rose to call attention to current trends and developments in the euro; and to move for Papers.
	My Lords, I am moving this Motion on behalf of my noble friend Lord Dykes, and at his request.
	My noble friend's Motion calls attention to current trends and developments in the euro. He is, unfortunately, not well, but was most anxious yesterday when it became clear that he could not be here that, as a number of noble Lords had prepared for this debate, it should go ahead. I very much welcome the fact that the noble Baroness, Lady McDonagh, has chosen to make her maiden speech and we all much look forward to hearing her.
	I shall confine my remarks to setting out a number of issues which come within the scope of this Motion. My noble friend Lord Taverne will, I am sure, be able to treat them more fully when he replies from these Benches. Whatever one's view about British membership of the euro-zone, and I should make it clear at the outset that it is my ambition to see the United Kingdom become a member of the euro-zone, there must be few who would see it as an issue of the near future—although I shall return to that in my concluding remarks.
	Therefore, our debate today will, I suspect, turn on current trends and developments within the existing euro-zone and, perhaps, the growing role of the euro as a global currency. Inevitably, that will involve the reactions on the currency markets to the recent referendums and the evolution of the stability and growth pact, particularly as it was amended at the European Council in March this year. The debate will also, no doubt, touch on the issue of the durability of the monetary union, which is a situation that some commentators have raised since the referendums in France and the Netherlands.
	Public discussion during the referendum campaign in the Netherlands and since, in the analysis of the votes, has suggested that the unpopularity of the euro was a factor in the "No" vote. This seems to have turned on the feeling that the Netherlands had gone into the monetary union at the wrong rate and that particularly the larger member states had not taken the fiscal disciplines of the stability and growth pact seriously and that that had led to a modification of the stability and growth pact to their advantage. That behaviour of their larger neighbours was much resented in Holland and clearly influenced votes in that referendum.
	On the other hand, the euro does not appear to have played such a significant part in the French referendum, apart from, as in Italy, criticisms of its perceived inflationary impact. There seems to be a universal problem about the perceptions of euro-generated inflation, which, on the whole, seem to conflict with the reports and analyses produced by the national statistical administrations. Perhaps the noble Lord, Lord Peston, may say whether he knows of any reason why there should be such a difference between perceptions and the analysis on this critical topic.
	One outcome of the referendums, if they lead to the end of the constitutional treaty, is that the euro-group, the euro-zone's finance Ministers, will not be granted official status. Under the existing European law, although they meet, they can only do so in an informal capacity. The adoption of the constitutional treaty would have given them more authority to co-ordinate fiscal policy and might also have made their relationship with the European Central Bank clearer.
	Turning to the current state of the euro-zone, in recent weeks there has been a great deal of pessimistic analysis. I found the short analysis in the recent OECD Economic Outlook, published about a month ago, one of the more objective pieces of analysis on this subject. It is a useful starting place. It recognises that over the euro-zone as a whole—there are exceptions, of which Ireland is the best known, but Spain has also been having a significantly higher rate of economic growth—economic recovery has lost momentum since mid-2004 but it will probably resume in 2006. Economic growth, even when it was doing relatively well, was at 2 per cent across the euro-zone; it is expected to fall this year to 1.25 per cent before recovering to reach 2 per cent next year. The OECD goes on to say that this has led not merely to a negative output gap but, more seriously, unemployment across the euro-zone is more than 8.5 per cent. That is not a happy situation.
	In its policy prescriptions for the euro-zone, the OECD says that there is room to ease monetary policy. That has been picked up in the press. Some easing of the exchange rate towards the end of this year is now anticipated. More importantly, the OECD reported on the need to work on structural policies which should aim at completing the European internal market, boost labour market performance and encourage innovation. Those sound rather like some of the objectives of the British presidency of the European Union. Finally, the OECD recommends that the euro-zone's fiscal policy should be rooted in long-term sustainability.
	The durability of the monetary union has featured in a good deal of recent discussion. I do not intend to spend very much time on the Italian debate, except to say that it is restricted to one political party; I have been unable to find support from any Italian economist or banker. However, after recent events it would be rash to predict how a referendum on this topic would go in Italy. I share the view of the chief economist of the European Central Bank, Otmar Issing, who suggests that members who want to leave the euro-zone would be committing economic suicide. I was interested to see the recent remark of the very distinguished Nobel prize winner, Robert Mundell, who did a lot of the classical work which pre-dated the euro-zone. He said:
	"There is less chance that EMU will be disbanded than there is of a collapse of the dollar".
	On second thoughts, I was not quite sure that that was too reassuring a remark.
	The certainty of EMU's long-term survival is being questioned. That is in part because some of those who support EMU and its project of monetary union, as well as a number of its opponents, have long believed that there is an essential connection between a monetary union and a political union, and that it is impossible to have one without the other. The apparent failure of the constitutional treaty is taken by some as the end of progress to a political union and as a very serious warning for monetary union.
	Noble Lords will know the historical precedents and examples quoted from the nineteenth century to this century of monetary unions which have not continued in the absence of political union. However, although some advocates of political union have prayed this argument in aid, the alternative argument, maintained from the time of the Maastricht Treaty, is that the mechanism set out in that treaty, particularly the stability and growth pact, means that there is no need for a political union to guarantee monetary union as long as three conditions prevail—fiscal discipline among the members of the union; Central Bank independence; and a reasonable degree of product and labour market flexibility.
	The problem that now leads to the discussion returning is that while no one would question the independence of the Central Bank, the other two conditions are by no means so clear cut. Even in the softer version, the stability and growth pact agreed by the European Council last March is still not providing fiscal discipline. The Commission has forecast that five of the 12 euro-zone members will breach the 3 per cent deficit to GDP ratio this year. I have not been able, at relatively short notice, to carry out a complete analysis, but I am told that there is very little sign that the larger member states have been in any way influenced in their behaviour by the fiscal rules set out in the stability and growth pact. That is somewhat ironic, given that some of them insisted on such a pact.
	Similarly, we know the difficulties that several of the larger members of the euro-zone have had in implementing economic reform, particularly in relation to the rigidities of their labour markets. Lack of progress in this area is sometimes obfuscated by ill defined references to a European social model. While much of the discussion on this concentrates on France, Germany and particularly Italy, we should not overlook the fact that Portugal and Greece, which receive a great deal less attention, are running the highest government budget deficits in the euro-zone.
	This situation does not lead to the inevitable demise of the project, but it suggests that both an acceptance of fiscal discipline by the members of the euro-zone and of the structural reforms referred to in the OECD Economic Outlook are required. At least in one respect, the policies for economic reform and a new attention to the Lisbon goals, which are closely related and were referred to in last night's speech by the Chancellor of the Exchequer and this morning's speech by the Prime Minister, suggest that the British presidency is aiming to take the whole of the European Union and, therefore, necessarily the members of the euro-zone, in the direction in which they need to go. I am not sure it was always realised what good friends the euro-zone had. The eternal optimist in me suggests that that might also bring forward the date of British entry into the euro-zone. I beg to move for Papers.

Lord Harrison: My Lords, I thank the noble Lord, Lord Roper, for that excellent introduction to the debate. I send our very best wishes to the noble Lord, Lord Dykes, who I know will very much regret not being here today. I, too, look forward to the maiden speech of my noble friend Lady McDonagh.
	I shall confine my remarks more to the British view of what is happening about our attitude towards the euro. I start with a story of small change in Britain today. My wife and I recently visited the Blackburn Museum and Art Gallery, where we found the Robert Edward Hart collection of ancient coins. The first part was devoted to the history of British coins—the chequered past, leading eventually to the pound from the groat, the mark and other variations—to that imperfect single currency we still have in the United Kingdom. In England, we still refuse to accept Scottish or Northern Irish notes—the ones that do not have the Queen's head on them.
	The second part of Hart's collection was devoted to Roman and foreign coins. The Roman coins represented a single currency throughout the then Europe; it was very successful throughout Europe and in Britain.
	My wife and I then passed out of the Blackburn Art Gallery and went to have a cup of tea at the coffee shop outside. By mistake, I gave some small change, in euros, to the waitress. She pointed this out to me and I forked out the pennies that were needed, but the owner of the café came up to me and said, "Don't worry about that at all. I'm very familiar with euros. Indeed, I have a euro account". He said that he was a familiar visitor to the Continent and found it advisable to keep euros.
	I give this example of "small change" in British life because it is important to draw some parallels between the Roman Empire and now. The Roman Empire needed a single currency to facilitate the business of being a Roman road-builder; the business of being a centurion or a foot-soldier; or the business of being a wine merchant or a corn contractor. And so in modern Europe's single market, it is the euro which facilitates the business of being an entrepreneur; the business of being a small businessperson; the business of being a student; the business of being a tourist or a financier or, indeed, a construction engineer. We fail to say and repeat that the main task of a single currency is to reinforce the single European market. It is that which leads us to the wealth of nations about which Adam Smith would have been so pleased.
	But the small change in Britain is happening. If you go to the British Museum today, where there is another magnificent coin collection, you are asked at the door to contribute $5, €5 or £3. The wealth of nations is coming into the British Museum. If you go outside to communicate with a friend on the other side of the European Union, you can now do so in the euro-friendly telephone kiosks. This is another "small change" in British history.
	But it is not all small change. I have been interested to read that "the tectonic plates are beginning to move", which is a favourite phrase of the Deputy Leader in another place. I learn, for instance, that Barclays's 700 branches—doubtlessly one of them is in Blackburn—now lend in euros, especially to people who are buying in the main holiday and retirement areas in southern Europe. This change has been brought about by the low-cost airlines, which too have been fostered by the single European market—another success. Barclays lends in euros, whether or not you have an income expressed in euros. Susan Clay, the European business director of Barclays, says that £57 billion of equity was taken out of the UK property market in 2003, most of which was tied up in homes in southern Europe. That is no wonder with a mortgage repayment rate of around 3.4 per cent.
	The noble Lord, Lord Roper, is right that joining the euro is not necessarily on the agenda for the United Kingdom today. I have not checked whether the Chancellor reiterated his five reasons for saying "no in thunder" in his Mansion House speech last night. I will do so later today. Nevertheless, the United Kingdom must be ready for the task of preparing for a time when the euro will be embraced in this country. Is the Treasury still actively preparing the reports, industry by industry, to make sure that we will be ready should that call come and the ensuing referendum results in a "Yes" vote? I ask the Minister whether we are making the proper preparations for the tourism, leisure and travel industries in particular.
	I reiterate that the tectonic plates are moving. Will the Minister discuss the creation of the new G4, which threatens to replace the G7 and the G8, of which our own Prime Minister is shortly to take up the reins? The G4 comprises the four countries of principal currency unions – the dollar, the yen, the euro-zone and the renminbi. Indeed, in my discussions this week with the Chinese officials from the People's Republic, they told me that the G4 is beginning to operate. It is not surprising that the leaders of its currency unions, who want to speak to each other authoritatively, are now meeting to discuss these important issues. It will be a shame if the United Kingdom is excluded from this conversation.
	In our debate in this country, we must avoid the kind of debilitating Euroscepticism which has punctuated the debate too often in this House. From the moment when the euro and the single currency were first conceived, those gainsayers and "painsayers" have always said that the United Kingdom should not be interested in what is happening in the European Union and our euro-zone border. They have always portrayed Europe in one way or another as a basket case. It is interesting that whenever the euro and its predecessors have moved one way or the other against the dollar, it was somehow always the euro that was depreciating out of control; it was never the dollar. There was never a proper analysis of some of the difficulties that the dollar experiences.
	We must reject the association of the single currency with failure. The recent "No" votes by the Dutch and the French should not lead us to equate the difficulties surrounding the constitution with those of the euro. The euro is strong and continues to be strong.
	I draw noble Lords' attention to a very interesting confirmation of what I have just said. Is the euro in its last throes? According to that noted Eurosceptic, Roger Bootle, apparently it is not. In February, he wrote an article entitled, "Should The Euro Be The Reserve Currency?" which is a matter to which the noble Lord, Lord Roper, has already turned. Mr Bootle pointed out that there was a rumour that South Korea's central bank might consider taking euros to denominate some of its reserves. He wrote:
	"Euro financial markets are broad and deep, the currency is fully convertible, the financial system and its institutions are well-known and trusted and the euro-zone is politically stable (at least for now). Moreover, the euro-zone is about the same size as the US in the world economy and just as important in world trade".
	That seems to me to be a confirmation that the euro is here to stay.
	Indeed, we must not say that the current crisis in Europe is a currency crisis, but we should look at what has been reduced to a contest between this country and France. A new and different vision of Europe has been articulated today by the Prime Minister in the European Parliament. Surely the Prime Minister is right to lay emphasis on the Lisbon agenda and on the importance of Europe spending money on research and development, education and training, and less on the CAP. We in this Chamber and in the polity in Britain really ought to have a common view that it is the Lisbon agenda and the single market that produce the wealth of nations, and that the single currency reinforces that single market.
	Before I finish, there is one other area that I would like to tackle—the European Central Bank. When, 10 years ago, I was a Member of the European Parliament and sat on its monetary sub-committee, we had the task of interviewing and talking to the proposed central bank people, including Mr Lamfalusi, when he was appointed as the head of the European Monetary Institute, as well as Mr Duesenberg and Mr Trichet. We were always at pains to remind them that while price stability was the main objective of the future European Central Bank, there was latitude in the Maastricht Treaty, which said that provided that price stability was ensured, interest rates could be used to facilitate and improve the workings of the single market and to encourage and stimulate investment.
	I am not sure that that message has always been understood—although it has been well understood in the American Federal Reserve, whose statute says that price stability and recognition of employment conditions are part and parcel of what it needs to do. What we have done in this country with the MPC may be a very helpful model for the future. But we understood that the European Central Bank needed to establish price stability to get the kind of encomium that it got from Roger Bootle, which I read out.
	I conclude by saying that this is a hugely important issue, which may currently be on the back burner but which will return increasingly as small change accelerates into greater change in this country, with the advent of the euro not only as a reserve currency but as one that is used in the streets of this country. It may not be everyone's cup of tea, but in the end we will drink it.

Lord Biffen: My Lords, this debate is the third this week on Europe, and there is a seamless thread that connects them all. It is greatly to our advantage that we are discussing Europe to the extent that we have devoted ourselves to doing this week, and in a spirit which on the whole has reflected well on this House. It certainly contrasts with the nature of the discussions that took place on the Continent. It seemed to me that the Council meetings on the budget were a classic example of open disagreement openly arrived at, with on the whole a fair degree of ill will all round. I cannot say that that disposes me to believe that these supranational organisations are necessarily the best ways in which to promote fraternity among the nations of Europe. But doubtless we shall see how all these matters proceed.
	I was particularly impressed—I say deferentially—by the remarks made the other day by my noble friend Lord Lawson of Blaby. His tour d'horizon of the European situation was masterly and highly realistic. If I had to take a quote for my mini-sermon today, it would be his remark that,
	"the pause needs to be prolonged and the reflection profound".—[Official Report, 21/6/05; col. 1550.]
	It is one of the most difficult things for a politician to do nothing—to engage in masterly lethargy—yet in some ways that is a tempting prospect for the Prime Minister. But doubtless he feels under an imperative to use his term as president to bring to the European scene panache, vigour, intellectual conviction and all the other terrifying components of public life. It is almost as if he had been attending evening classes at the Chicago school of economics, because he has come with a programme which is really quite daunting in what it purports to do with regard to European public spending and spending on the common agricultural policy—in terms not merely of single payments but in what we spend on the environmental activities of agriculture and animal welfare.
	All that, ironically, has happened on the very day that the Commission produced its proposals for sugar, which is supposed to be part of the enhancing relationship between us and the third world, only to have it condemned by Oxfam as being unfair to the Caribbean and African sugar producers. But I leave that as part of the footnotes about which we will argue in the coming time.
	However, I wish my Prime Minister every success—I do not like seeing him being savaged by the wrath of Luxembourg. This country deserves to be treated with proper respect and regard. But a period of inactivity would be just as well as a period of activity that could be seen only as us presenting our market view of Europe against the social programme of the French. I take no part in adjudicating which is the superior; all I say is that each country can make its own judgment, having regard to its own national character and heritage. When I hear the noble Lord, Lord Harrison, refer generously to Adam Smith, I realise that there is a bond that unites us that is quite independent of our own politics.
	The period of presidency is limited to six months, and—perhaps understandably—the Prime Minister comes to it with the excitement almost of a born-again John Kennedy, and his 100 days of vigorous action. I hope that we survive it without too much damage, and that perhaps he will be able to secure certain reforms and directions. But the reform that I would most welcome is to concentrate on how we could disaggregate the European partnership so that more and more it related to national decisions, reacting to national circumstances and national inheritance, and less and less trying to put on us a continental imprint.
	I do not regard that opinion as in any sense reactionary—or, dare I use the word, Euro-sceptic, which is now treated like an outbreak of smallpox. As was argued on Tuesday—not by noble Lords from a Euro-sceptic viewpoint, but from the point of view of Members of this House who have established great European reputations—it is a matter of taking the Lisbon agenda as being more appropriate for the national decision processes, rather than being elevated into an aspect of European policy.
	I turn to the very item of today's discussions. I must say how much I appreciate the fact that the Liberal Party has chosen this as a topic, as it rounds off our Euro week. I am very sorry that the noble Lord, Lord Dykes, could not be here to deliver his speech, because I believe that I could truthfully say that of all the Members sitting on the Liberal Benches, he is the one most committed to the concept of a European currency, with all the rigours and fixed rates that that implies. But I welcomed the scholarly analysis made by the noble Lord, Lord Roper.
	I shall make three fairly simple points about the currency arrangements and the euro, not from the point of view of someone drawing on economic prejudices but from that of a street politician. The first point is that the euro-zone has very considerable difficulties; I do not believe that one is being unduly partisan to observe that. Those difficulties are represented by the way in which the stabilisation pact must be redrawn and is argued about and disregarded. I am reminded powerfully of an article written not that long ago by the noble Lord, Lord Rees-Mogg, in which he said that, at the end of the day, whatever may be the formal banking constraints, domestic politics will triumph—and domestic politics is showing a pretty good sense of durability.
	Whatever will be the success of the euro-zone at the end of the day will depend upon the success of the national governments who comprise the euro-zone in conducting their public spending, borrowing, taxation and the like in a way that is responsible and that is consistent with what are the assumed objectives of policy, and upon their not retreating into rhetoric as an alternative to action. I say that in no sense of hostility to the euro-zone. However, I am puzzled by the whole formula of the stabilisation pact, particularly when my noble and learned friend Lord Howe said in Tuesday's debate:
	"Nor . . . is the Stability and Growth Pact an agenda for the Union, because it simply spells out the implications of economic sanity, which the markets will in the end enforce come what may".—[Official Report, 21/6/05; col. 1559.]
	I must say if that were a really compelling analysis of the situation—I find it rather elliptical—I wonder what the governments in all these countries are doing if it is all going to happen anyway and they have only to sit on their hands, or perhaps because of their inability to sit on their hands these difficulties are now arising. All I can say is that I have no hostility to the euro-zone.
	However, that takes me to my second point which is that I have no desire to see this country within the euro-zone. We have now had a period of experience. Like Abbé Sieyès, we may say at the end of it, "J'ai vecu". We have survived. Here we are. We have our sterling. We are running our own policy, which is controversial. I happen to think that there is an overemphasis on government borrowing, certainly when it is coupled with high levels of private borrowing. None the less we have a formula that has enabled the establishment of a relationship between the Bank of England and the politician. I believe that is enviable. We have been immensely well served by the noble Lord, Lord George, and, currently, by Mervyn King. I admire the way in which the Chancellor has been able to use the relationship in a way that stands us in good stead. I am not sure whether that will always be the case. It will possibly be undermined by unwise political decisions. That is for the future. Here and now I see absolutely no reason to surrender an institution which, so far as I can see, affects beneficially the conduct of policy. When I hear talk of linking together all these things to promote the establishment of a master European currency, which by its very existence will bring about greater prosperity, I believe that we have lost the powers of analysis to the powers of an almost religious assertion.
	That brings me to my final point; that is, the vogue for having a single currency is closely related to the idea that a European Union must have a single market. It may have an aspiration to a single market but the pursuit of a single market is leading us into an immense web of bureaucracy, complexity and disillusion. The very aspiration is so gargantuan that it should cause us to check and to reflect on whether that is proceeding in the right direction, and above all, proceeding in the right direction when we are looking forward to the day when Turkey and the Ukraine will be in the wider Europe. All this leads me to think that what we need is a recrudescence of—I recall this cheerfully—the days when Harold Wilson as a domestic trade Minister said that he wanted a bonfire of controls. What we need is to look at the acquis. The acquis is so immense that War and Peace looks like a pocket dictionary compared with it.
	There is an overwhelming desire to go back to first principles and to say that we accept movement and flexibility as regards currency but because we disavow the desire to have one single fixed currency we are relieved of some of the more absurd ambitions of the single market. Unless and until we do that, we shall always be struggling in the difficulty in which there is an appalling gap between private instinct and views and public policy. That gap can exist perhaps for decades but sooner or later it will all end in tears.

Baroness McDonagh: My Lords, I welcome the opportunity to speak for the first time in the House. I understand that it is customary in one's maiden speech to say how warm and welcoming the House is. However, I think I took that reputation a little too literally. Soon after I was introduced I entered the Chamber on my second day and cast around for somewhere to sit. I saw no one on the Labour Benches who I recognised. Sensing my rising panic, the right reverend Prelates on the Bishops' Benches smiled at me with encouragement. I mistook that for an invitation to sit with them. No sooner had I sat down than they all rose to their feet with a speed of which I did not think them capable.
	Clearly, the Church of England in recent years has undergone much modernisation, but I think that a woman Bishop, certainly of the Catholic variety, was a step too far. However, I am sure all noble Lords will want to join me in congratulating them on the recent appointment of John Sentamu as the new Archbishop of York. We wish him well in his mission.
	It is a great honour for me to serve in this House. For nearly all my adult life I have worked at the other end of politics, trying to make the Labour Party electable and then to get it elected. My ambition went no further than wanting to see Labour win and then be re-elected for a second term. I cannot tell noble Lords how pleased I am that that narrow ambition has now been surpassed.
	Before I entered this House I was General Secretary of the Labour Party. Now that I have arrived in this House I am pleased to see that I am not alone. Indeed, with the noble Lords, Lord Whitty, Lord Sawyer and Lord Triesman, on these same Benches, I am somewhat concerned that now that we have replaced hereditary peerages, ex-general secretaries of the Labour Party now form the largest grouping.
	I am also pleased that my sister is here today to witness my first speech. She comes from another place. I should like to tell noble Lords that that is something our parents have known all along. It was a great thrill for me to see her first elected in 1997 and then re-elected in 2001 and 2005. I was recently told that this is the first time that two sisters have sat in each House respectively. We both believe that this has nothing to do with our talents but has a great deal to do with the progressive policies of the Labour Party in increasing the number of women representatives. We consider that that has enhanced public policy making in recent years.
	As noble Lords will know by now, I am very proud of the Labour Party—a party I joined while still at school—and of what the Labour Government have achieved in the past eight years: economic efficiency coupled with social justice. I am sure that noble Lords on all sides of the House agree that economic stability, low inflation, low interest rates, decreasing unemployment and rising standards in schools are all great achievements. However, one common theme in all these achievements is that they match the concerns of those we seek to serve. What we discuss in these Houses is what the public discuss at home. Unfortunately, that cannot be said for our European institutions. They seem to be unresponsive to public opinion and to speak a language that is not understood by the public in any of the member states.
	I am proud to call myself a European; the vision of the EU is one with which I strongly agree. We all understand that with globalisation we rely on one another more than at any time in our history. But before you can begin to rely on any individual organisation or institution, you must be able to trust them and to have confidence in them. To make the decision about whether we can do that, we all have shortcuts. We ask ourselves—how will they react at times of crises? Do they run from difficult decisions? Will they reform and modernise if required? The public, not just in our country but recently also in France and the Netherlands, have come to the conclusion that the EU is not ready to take difficult decisions. Its failure to find a permanent European Parliament in one city is just one decision that it has failed to make. Consequently, trust in the euro and in Europe in general is now at a low ebb. Those are the symptoms, not the cause of the problem. For example, the problem of high unemployment in many member states is not the euro, but it is failure to reform.
	The euro was introduced at a time and in economic circumstances that were not appropriate for Britain. That is why we chose not to enter in the first phase. I believe that was the right decision by the Government, and I also believe that the tests of when and whether we join the euro are right. I know that they will be applied rigorously by the Government. That is the minimum of what is expected of us by hardworking families, whose lives we know we can hurt if we make the wrong decision. As Pope Pius XI said:
	"Economic power is headstrong and vehement, and if it is to prove beneficial to mankind it must be securely curbed and regulated with prudence".
	I thank noble Lords for this opportunity to speak, and I look forward to participating in future debates.

Lord Rees-Mogg: My Lords, it is a great pleasure to have the opportunity to congratulate the noble Baroness, Lady McDonagh, on a distinguished maiden speech. She was careful in managing to avoid undue controversy. She quite properly paid tribute to her past work for the Labour Party, which has been a devotion of her life. She is one of a distinguished group of former general secretaries of the Labour Party. I felt almost that rising immediately after her I ought to have held that post myself.
	The noble Baroness also had a distinguished career in Fleet Street, and there perhaps I feel rather closer to her. I notice that the lawyers in this House often hang together, and I think that the newspaper people ought to hang together as well. At any rate, we look forward very much to more speeches from her.
	This has been an interesting and excellent debate. I join all other noble Lords who have expressed their regret that the noble Lord, Lord Dykes, was not able to be present. I wish that he will get well as soon as possible. I thank the noble Lord, Lord Roper, for taking his place and for putting a moderate and balanced case, from the point of view of the Liberal Democrats, on how they see the euro in its present stage.
	The noble Lord was right to concentrate a part of his speech on what seems to me to be the real intellectual question behind this debate. That question is whether in fact it is possible to have a single currency, and make that single currency work over time, unless you have a single government. Certainly the dollar, which is a currency that despite considerable vicissitudes has lasted well over a couple of hundred years, has been dependent on the strength of the federal government and on the strength of the Federal Reserve board for the stability that has on the whole been maintained. The United Kingdom has had a single currency over the whole of the United Kingdom, which has been dependent on government action and action by the Bank of England that have enabled it to be successful.
	It is rather harder to find in the history of currencies single currencies that have lasted for more than a generation or so—a generation is not terribly long in the history of a currency—without having that basic backing of a single government. It is certainly apparent now that the resistance in Europe as we saw in the referendums in France and the Netherlands to the development of a single European government are much greater than they were. We are not, as many people on both sides of the argument thought, moving inevitably towards a united states of Europe. I do not think that project is dead or killed; there are still important forces in Europe that would like to move in that direction, but the inevitability has gone.
	That seems to be the central question that must be faced; all the more because of the apparent breakdown of the stability and growth pact. It really is very serious that the condition that was put in to protect the euro—the single currency—against the mismanagement of their own finances by the individual governments of the euro-zone has not been honoured by two or three of the largest and most important governments of the euro-zone. There is a real danger that the rising budget deficits of several euro-zone countries will cause serious financial problems and a decline in confidence in the currency. That is obviously a negative point.
	Perhaps we need most to examine the case of Italy. Italy has a long record of running its financial affairs so as to incur as a consequence of over-expenditure—too large deficits—a succession of devaluations. That is really the currency history of Italy throughout the late 19th century and certainly the whole of the 20th century. They took the opportunity when Britain left the exchange rate mechanism to have another, and so far final, devaluation of the lira. Italy does not have that sort of stoic fortitude that enables some countries, including particularly Germany, to maintain a really strong currency over at least a generation or two.
	The figures for the deterioration of the bilateral economic relationship between Germany and Italy in the past 10 years are really quite astonishing. The Germans, with immense self-discipline, have managed to reduce the unit cost of labour by slightly over 1 per cent over the past 10 years. They have had absolute stability, with a slight trend downwards.
	Italy's unit labour cost figures have risen by 38.7 per cent in the same 10 years. That means that there has been a deterioration of no less than 40 per cent in the bilateral trading relationship in terms of labour costs between Italy and Germany since 1995, which is the relevant period. In theory, Italy could put that right by squeezing its own economy, having a major deflation and forcing prices and costs down. However, that is not at all likely. Italy has no tradition of doing that; its tradition is one of devaluation. It already has unemployment at about 11 per cent.
	However, the rise of Italian costs inside what is essentially, although not totally, a fixed currency rather than a floating currency has produced a crisis in, for instance, Italian textile exports, which are not competitive with those of Asia. It has produced another crisis in Fiat, Italy's largest automobile company. General Motors paid $1 billion not to be required to carry out its obligation under contract to buy Fiat, which means that, from the point of view of General Motors, Fiat was worth minus $1 billion to avoid taking on that responsibility. In May, Fiat sales were down no less than 23 per cent on sales in May the previous year.
	In that situation, it is not surprising that a government who have done extremely badly in the regional elections because of basic resentment about the country's economy should have at least one of its coalition partners advocate a withdrawal from the euro and a return to the lira. No doubt that would be followed by one of the lira devaluations with which we used to be so familiar.
	Italy's problem is that it needs a major economic adjustment. In the old days, it used to make such economic adjustments through adjusting the currency downwards. Desirably or undesirably, that is how it did it. The only other way to do it is to squeeze the economy. Italy does not have the political consent of its own people to squeeze its economy in that way and push unemployment up further. It would lead to the government being inevitably expelled from office.
	Italy has been caught by what the critics of the single European currency always said was the problem—that you could have a major European nation inside the euro in circumstances in which it needed to make a major adjustment to its economy, and where that adjustment naturally meant a devaluation and devaluation was impossible, but that the people were prepared neither to put up with the suffering required to make the adjustment nor politically to continue with the situation in which they found themselves.
	A considerable number of further difficulties arise. One is the Italian bond market, and the way in which it is possible to speculate against the continued existence of the euro not in the currency itself, but in the Eurobonds issued by different countries. A growing speculation is now in favour of German-denominated Eurobonds and against Italian, Greek and Portuguese-denominated ones. You have the risk of a speculation similar to that suffered by the pound from Mr Soros 13 years ago. I do not believe that that will happen very fast, but it is not true to say that it is not possible for the market itself to start to put pressure on the future of the euro.
	The problem is not new. Not many of us are here today, and perhaps we share a fascination for the intellectual history of currencies. The great episode in this country—it led to a single currency not supported by a single government breaking up—was of course the return to the gold standard in 1925, and its abandonment by the Ramsay Macdonald government in 1931. You can have a currency with great authority behind it, which the euro to some extent still has. However, if you get into a situation in which the economics and the politics make it impossible to continue, a government can wake up and find that they have no recourse but to leave that currency. The British government did that in 1931. An Italian government may find themselves forced to do that and leave the euro at some point in the coming years.

Lord Peston: My Lords, setting up the European monetary system is the greatest economic achievement of the European Union. As a currency union comprising 12 countries and a population of 300 million, and in the process of becoming larger still, it represents a remarkable step forward in economic integration. Much to my regret, although I understand why, we were not in at the beginning and have engaged in continuous sniping since. As kibitzers, we should not wonder that the real players do not take us seriously at all. Certainly if there are aspects of the euro area that we do not like—there are several—we have only ourselves to blame. I shall not go over the "I told you so" stuff connected with the CAP as well, but it is the same story written over a much longer period.
	In that sense, I congratulate the noble Lord, Lord Dykes, on winning the ballot and choosing the subject. Like all noble Lords, I hope that he will make a quick recovery from illness. I also thank the noble Lord, Lord Roper, for introducing the debate. Having said that, deep down I believe that we are wasting our time. It is apparent that the Government will not join the EMS over any realistic time horizon—by which I mean my life expectancy. The Official Opposition seem to be content to stay precisely that for at least the same length of time. Even if eventually—goodness knows how long "eventually" is for them these days—they did become the government one day, they too say that they would not join monetary union. For those of us who wish to see our country at the heart of Europe, that is all deeply saddening.
	That is especially so if we accept what the noble Lord, Lord Lawson, said on Tuesday; I apologise to him as he leaves. It must be difficult for him to be congratulated from both sides of the House, but he said that the rationale of the European project had always been political, not economic. I agree totally. The reason that, in a sense, our economic analysis in the debate is somewhat irrelevant is precisely because we do not follow his correct dictum that we really ought to discuss the politics, not the economics. Having said all that, and having said that we are wasting our time, I have another two and a half pages of notes and naturally I have no intention of not reading them. I want therefore to look at the achievements. Inflation has been kept low and stable, which is the primary function of the ECB. Exchange rates between member countries have, ex definitione, ceased to vary. The external value of the euro has obviously varied, notably against the dollar. But even after the recent fiasco on the referendums on the new constitution, the euro has not weakened to any great degree.
	The overall balance of payments in the euro-zone is in surplus largely due to the enormous surpluses of Germany and France. Short-term interest rates in the euro-zone are lower than in other countries and have been falling. An even more important point that we should not ignore is that capital markets have become much more integrated and will continue to do so.
	However, more important than any of those issues is that at the simplest level the single currency has been a success; namely, it has worked in precisely the way a currency is supposed to work. It operates with no difficulty whatever as a medium of exchange or as a store of value—precisely what Adam Smith would have said was the real pre-requisite for judging this situation. Bearing in mind all the prophets of doom, we should not ignore how amazingly, straightforwardly and simply it was introduced and has worked.
	I must admit that even though I was in favour, I expected infinitely more difficulties. The so-called Europhobes, who want a free-trade area rather than a European Union, should understand that a common currency is a vital prerequisite for an efficient system of free trade. It provides exactly what is needed; namely, financial stability. And, for the more profligate, it prevents the easy but only temporary way out of economic difficulties; namely, it stops you inflating your way out of trouble and it stops you devaluing out of trouble.
	In that connection, I am astonished that Italy, of all countries, should have any leading public figure saying that it would be better off outside monetary union. It would be idiotic, indeed insane, for the Italians to believe that they would be better off if they left the euro. Referring to what was said by the noble Lord, Lord Rees-Mogg, I can assume only that whichever Italian would say that must literally have forgotten the mess symbolised by the behaviour of the lira over many decades. Many of us who in our younger days travelled to Italy could never remember what the lira was worth from day to day, let alone over any reasonable period. If one country is going to gain by not pursuing the path of unsound public finance and an unwillingness to address the real problems which the noble Lord, Lord Rees-Mogg, rightly pointed out, it is Italy.
	Before coming to the problems of the European monetary system, let me add that I am not one of those who believes that the evidence supports the proposition that the introduction of the euro has led to a rise in average prices. Even if one or two economists believe that, the numbers we are talking about are small indeed. But the euro has one other marvellous function: it provides a convenient whipping boy for anyone who wants to allocate blame for whatever is going on in the economy—notably the odd price change and so forth. It reminds me very much of the early days of decimalisation when any price increase, whatever the true cause, always attracted the comment, "We should never have decimalised".
	Referring to an earlier remark on the exchange rate, I wish that critics would make up their minds whether the problem with the euro is that it is too strong or too weak. Perhaps their position is that whatever its value, it is wrong. That is a state of economics that even I do not have the imagination to work through.
	What are the true problems of the European monetary system? The obvious one is the difficulty of adjustments in nominal wages. If overall inflation and public finances are held in control, short of a productivity miracle, which is pie in the sky in practice, excessive wage rises must lead to greater unemployment and recession. There is no way around that. On the supply side, goods and services cannot be sold profitably and on the demand side prices will rise to some extent so demand will fall, too. Clearly, one has to face the wage or the unemployment and recession problem.
	Secondly, even without wage pressure, competition, not least that deriving from productivity differentials both at home and abroad, also necessitates structural adjustment. Labour mobility between industries and their locations has to increase, even though it may lead to disruption in people's lives. In addition, however, retraining and the acquisition of new skills must become the norm.
	But there is nothing special about euro-zones. Taking the Longbridge example, if we cannot produce decent cars at a profitable price, unfortunately, a particular industry and the demand for the skills of decent people diminishes. The response to that is not to devalue and, in my judgment, not to throw skilled men and women on the scrap heap and to pay them social security indefinitely. It is precisely to do what Italy and everyone else needs to do—we have to retrain and guide people towards new forms of work. In other words, structural adjustment becomes of the essence. Furthermore, even though we need to look carefully at the whole public finance structure and the nature of the stability and growth pact, whatever you do about it, you do not get away from the problem of structural adjustment. There really is no easy way out.
	My last such comment, before making one or two slightly controversial remarks, concerns the behaviour of the ECB. Here I echo some of the remarks of my noble friend Lady McDonagh. If we are to learn one lesson from the EU constitution mess, it is that we live in a world where ordinary people expect to be taken seriously. They no longer accept that something is right because this or that great figure says so. The ECB, whose head is a person of outstanding merit, does too little to take into its confidence the people it is meant to serve. It still wishes to retain the aura of a traditional central bank, with its emphasis on secrecy.
	That was particularly true when, according to the Financial Times, M. Trichet refused to say whether they even considered thinking about an interest rate adjustment. It reminds me—and one or two noble Lords present will also remember—of when in the 1960s Harold Wilson issued a diktat that no one in the Treasury was supposed to admit that any thought had been given to devaluation. If asked, they said, "No, we never discuss that sort of thing". I was very young then, but a number of people rang me and the only subject they wanted to discuss was devaluation. Therefore, I would have thought that Harold Wilson had failed in that. The idea you can pretend that delicate, sensitive matters are not debated and therefore you will not talk about them is preposterous.
	I conclude as I began. The construction of the euro area has been a great achievement. One or two Members in the debate on Tuesday used phrases such as "failure of the euro" or "the currency has not worked". That is preposterous: the euro is not remotely near to being a failure and, importantly, it has worked infinitely better than any of us would have anticipated. Full success requires many more economic reforms and, in my judgment, it requires full UK participation.

Lord Taverne: My Lords, I echo the remarks made by others who have referred to the great pleasure of listening to the maiden speech of the noble Baroness, Lady McDonagh. It was a charming speech and she made a number of extremely important points.
	I also echo the regret that my noble friend Lord Dykes was not able to introduce the debate. Instead, we had a very good introduction to the issues from my noble friend Lord Roper. It has been very useful to have a discussion of the euro as the last in the series of debates this week on Europe.
	I believe it is generally agreed that, at this moment, the euro-zone faces a number of very serious problems, which are of considerable concern to us. I am glad that those who have questioned the euro and its advantages in the past have not gloated about its present predicament. The success and prosperity of the euro-zone is of very great importance to us, even if we stay outside it. It is our biggest market. We have always been strong champions of the enlargement of the European Union, and there is no doubt that what attracted the new members to the euro-zone, and continues to attract other states to apply for membership, is not only the attractions of political security, but also the strength and stability that the European Union has presented, with the core constituted by the euro-zone. Those states would also be greatly affected if the present malaise turned into a serious crisis.
	It is perhaps suitable that we should look back at the history, the successes, the failures or the disappointments of the euro-zone in the past six or seven years since its formation. There have certainly been gains, as the noble Lord, Lord Peston, has pointed out, but, make no bones about it, there have also been considerable disappointments. The noble Lord, Lord Rees-Mogg, rightly focused the argument on whether a monetary union requires a political union.
	The view of the Bundesbank, as well as that of the noble Lord, Lord Rees-Mogg, and a number of other commentators, has always been that one needed a political union to secure the long-term viability of monetary union. That was the argument not only of the Bundesbank, but also of Germany. That view may still be held as necessary, but I believe that the idea of a political union is more or less dead. The noble Baroness, Lady McDonagh, was quite right in saying that that requires a degree of trust and confidence in the institutions which simply does not exist. National agendas have been pursued, which shows that, at the moment, there is no public support for a political union of Europe.
	It has also been argued by another school of thought—for example, by the very eminent economist of the European Central Bank, Otmar Issing—that monetary union is not required. One requires the co-ordination of fiscal and monetary policy, but that can be achieved without political union. As my noble friend Lord Roper pointed out, it requires three factors: the independence of the central bank, which we have; fiscal discipline; and labour and product market flexibility.
	An interesting and critical view of the record of the European monetary union has been undertaken by the Centre for European Policy Studies, in which some very important questions were raised by a number of eminent economists, including M. Daniel Gros. First, there is the performance of the central bank. I do not necessarily agree with the noble Lord, Lord Peston—with whom I normally agree—that that has been defective. It has maintained stability and low inflation and in those respects it has been a signal success. Whether it should ease monetary policy at present is, to some extent, a moot point. I agree with the report from the OECD that some easing is now required, but if it took a very relaxed view of monetary easing, that could endanger the view of the Union as such. I do not believe that the ECB is responsible for the present difficulties of the European Union.
	The second requirement is fiscal discipline, hence the stability and growth pact which, of course, has been abandoned. In the situation in which we found ourselves, it was inevitable that the strict rules originally required for the stability and growth pact would be relaxed. To insist on rigorous fines for any excess over the 3 per cent limit would be quite inappropriate in the circumstances in which Germany, France and others may find themselves.
	However, there was a lack of fiscal discipline. The snag was that that lack of fiscal discipline was evident at the top of the economic cycle when there should have been discipline and in fact attitudes were lax. National policies—often narrow, mistaken national policies—were followed. It has been argued that one did not need the stability and growth pact because the discipline of the market would have been sufficient. The discipline of the market is important, but it was not just national interest that should have been considered.
	Within the euro-zone everyone stood to gain from a policy that also took account of the interests of the euro-zone as a whole, and unfortunately that was not evident. The result has been, as the CEPS study has pointed out, that instead of having the convergence of economies that one expected inside the European Union, one of the disappointments of the past six or seven years has been that the economies have diverged.
	As the noble Lord, Lord Rees-Mogg, pointed out, the most signal case is Italy. Not only has there been a very considerable rise in unit labour costs, but Italy's real exchange rate has risen since the monetary union started by some 15 per cent.
	I do not take the view of the noble Lord, Lord Rees-Mogg, who says that this is a basket case that will never correct itself. Of course, action will have to be taken, but in the past Italy has taken some very courageous steps. One should not forget the very important Amato and Dini reform of pensions, which will take a long time to work through. That was brave, courageous and very realistic. One cannot say that this is a basket case. It would be extraordinary if Italy were to leave the Union because that would be the worst possible case for the future well-being of Italy. The effect on government bonds would be absolutely disastrous.
	As my noble friend Lord Roper pointed out, the third element in the Otmar prescription, as it were—indeed, the general requirements of a monetary union if one does not have political union—is the flexibility of labour markets above all, as the noble Lord, Lord Peston, said.
	One has to admit that so far the Lisbon agenda has failed. As the noble Lord, Lord Lawson, and others pointed out yesterday, essentially that is a domestic agenda. Its failure would have had an unfortunate effect on the economies of the euro-zone countries if there had been no euro. In fact, it is very doubtful whether any of the euro countries would be in a better position today if there had been no euro. There might not have been fiscal stability, but all the failures to adapt the structural reforms that are required were no more likely to have happened outside the euro than within the euro. There have been national failures.
	One has seen a certain element of protectionism in Germany with its requirement for high minimum wages to keep out foreign labour and in France with the rejection of the financial services directive, objection to open borders and continuation of certain subsidies. As Robert Mundell pointed out, a collapse of the European Union is not likely, unless there is runaway inflation, in which case the low inflation countries, such as Germany, might wish to be part of it no longer. I do not believe we are likely to see that.
	One should also not forget that Ireland is one country that has prospered enormously inside the monetary union. I do not believe that any members of the Irish Government would wish to leave the monetary union because of the troubles that it has had. Spain has prospered in the monetary union. The troubles of those who are not members of the monetary union are not due to the high interest rates, because historically the interest rates that Germany now faces are no higher than it has faced in the past. The answer lies with the OECD agenda, but we should bear certain things in mind when we may be tempted to turn to the European Union and say that if only it had followed our prescriptions it would be in a much better state and when come to the conclusion, as is now reasonable, that this is not the moment that we should join, it is an academic question in any event.
	We should not forget the points made by the noble Lords, Lord Harrison and Lord Peston. The first is that the euro reinforces the single market. The noble Lord, Lord Biffen, apparently accepts the logic that the euro is a very important part of the idea of a single market. But, rather surprisingly, he seemed to reject the single market. He said that it was an impossible aim and if one tried to achieve it one would have a plethora of regulations that we must abandon. I thought that it was generally accepted in this country that the single market has been of enormous benefit to our economy and trade. I agree with the argument that there is a logic about a single currency and a single market. That is one of the reasons why the last thing we should do is rule it out. Free trade is furthered by a single market. One only has to compare the degree of the non-domestic trade of countries within the euro-zone with the degree of the non-domestic trade of Canada within the free trade zone of north America.
	The second point made by the noble Lord, Lord Harrison, was that the current crisis is not a currency crisis, and I have made that point myself. It is the failure of the Lisbon agenda, that is, a failure of domestic action.
	The third important point is that in the next few years important decisions will be taken by the euro-zone to deal with the problems that it now faces. They will be important decisions that will affect us as well as the members of the euro-zone. We will be completely excluded from those decisions. We should not forget that one of the important arguments for being a member of the euro-zone is that we would then have political influence and that our political influence inside Europe as a whole is diminished while we remain outside the inner group.

Lord Howell of Guildford: My Lords, like other noble Lords, I am extremely sorry to hear about the illness of the noble Lord, Lord Dykes. I hope that he recovers soon. I am very grateful to the noble Lord, Lord Roper, for giving us the chance for this short debate. I would go further and say that I thought his speech was admirably realistic, as the noble Lord, Lord Rees-Mogg, said.
	I derive faint amusement from the fact that it seems now that we have all become what were called "Euro-realists". Even the Chancellor has joined the group, although—this is a superb touch—it turns out that although he is saying exactly the same thing as many of us have said for many years, when he says it, it is now called "pro-Europe realism". It is a truly Mandelsonian touch: saying what everyone else has long been saying and pointing out but giving it a special branding. I do not care what they call it or what label they put on the jar. If we are going to have European realism at last, it is extremely welcome.
	The euro, which we are here to discuss, has been paying the price for all the political bickering. It has dropped a sharp number of cents in recent days from its very high level. That was what the noble Baroness, Lady McDonagh, pointed out in her excellent maiden speech, which was commendably brief, marvellously well focused and thoroughly enjoyable. I congratulate her on it. If the Euro-constitution has capsized—I think it has sunk, though some bits of it will be salvaged—are we allowed to ask whether the same fate could happen to the Euro-currency? I am reassured by the noble Lord, Lord Peston, that, despite the efforts of Harold Wilson, they went on discussing devaluation in the Treasury in his day. So perhaps it is a permissible discussion even though, obviously, one must handle it in careful terms.
	Before the whole idea is dismissed as unthinkable, it has to be remembered—as the noble Lord, Lord Peston, also pointed out—that the euro was originally introduced not as a monetary scheme but as a political one. It was depicted—there are many quotations to support this—as a giant step forward towards political union in Europe and towards the emergence of one integrated European bloc that would be a rival to the almighty dollar and to American hegemony. All this was said a hundred times and all this will be pointed out a hundred times. The euro was, and remains, a political construction.
	As I recall it, from the start—and I was one of two English representatives on Giscard d'Estaing's committee for monetary union—there were going to be three pillars. The first was monetary cohesion, which was to be provided by the European Central Bank. The second was budgetary and fiscal solidarity, which in the first phase was to be provided by the so-called "stability pact", rechristened "the stability and growth pact". The third pillar was to be the eventual political cohesion and integration of the EU member states, with the implication of a single government of sorts, as the noble Lord, Lord Rees-Mogg, also pointed out.
	The first pillar remains in place. We have discussed the European Central Bank. It has a difficult task, but it is very much in action and it is operative. The second pillar, of course, has crumbled, as several noble Lords have pointed out. Budgetary discipline has been abandoned in Italy and could well be discarded in Germany itself. It is obvious that several states in the zone find it intolerable that their public spending, and the borrowing necessary to finance it, should be limited by rules which seem to them unnecessary, onerous or just plain politically embarrassing or impossible to sell to their electorates. New and much laxer rules for budgetary limits within euro-zone states have now been devised with conditions which seem to be so extensive that they allow almost any pattern of behaviour. There is certainly very little discipline.
	Yet it was this stability and growth pact which was supposed to be the rock on which the whole thing rested pending the arrival of full political union in Europe. I remember going to see the then chairman of the Bundesbank, Mr Hans Tietmeyer, before the arrival of the euro and asking him how it would work if there were no political union. Chancellor Kohl had said many times that there had to be political union for it to work. Mr Tietmeyer said that it would be all right because the stability pact would hold everything together. That was the structure on which the whole system would rest. But now that structure has begun to wobble; indeed, it has come apart completely.
	The third pillar, political union, has not arrived. Moreover, as noble Lords have said, the prospects for it have been very severely shaken by recent events and by the French and Dutch referendums.
	So the outcome, which we can all see, is that the euro, which until recently looked remarkably strong, suddenly looks in financial markets to be a riskier proposition. If one adds to that the strains that already existed, of trying to impose a single interest rate on 25 highly diverse economies, one can see why the financial community is getting increasingly uneasy about the whole thing. Indeed, the other day, the OECD—not at all a critic of the euro-zone—stated that it now sees the euro-zone as a zone of "widely divergent" economic activity. That is a challenge to those who hoped that by now there would be a harmonised and uniform pattern of economic activity.
	As we have heard from noble Lords who speak with enormous expertise, the Italians are finding it very irksome indeed. An Italian Minister has spoken out calling for the return of the lira. Lombard Research told us yesterday that its Italian informants believe that the euro is "asphyxiating" the Italian economy. As the noble Lord, Lord Rees-Mogg, so graphically described, Italy no longer has the opportunity to find an outlet, a steam-release valve, in devaluation. For many years, it has not had the political strength to resist public spending growth or to impose swingeing internal cuts.
	Meanwhile, the Dutch have also complained loudly. They have said that they should have followed the British policy and stayed well clear of the euro-zone. There have even been rumours from Frankfurt of all places, the heartland of financial prudence, that all is not well with the euro.
	The irony in all this is that the main alternative in international markets to the euro, namely the US dollar, has been looking far from healthy itself. Very recently, the central banks of China, Japan, South Korea and other Asian nations, which over the past few years have been patiently accumulating enormous dollar reserves to prop up the dollar and finance American consumption, were just beginning to switch some of their holdings into euros. That is why the dollar had been sagging and why the euro had been rising so amazingly high.
	Suddenly all that has changed. The euro's longer-term future no longer looks so good, so we now hear that some of the Asian central bankers are having second thoughts. Of course, the outward and visible sign of that is a very sharp drop in the euro/dollar exchange rate.
	So where now for a currency which was born with high hopes but which now has not only not a single government behind it but no hope that such a government will ever come into being? One obvious point is that the British will, I imagine, be reinforced, including this Government, in their determination to stay well clear of the euro-zone and therefore clear of the very sharp swings between the euro and the dollar which have added to international instability. We have always been told that the euro was going to increase stability; of course it has done the opposite.
	Another likelihood is that the recent new entrants into the EU from central Europe will be a little more cautious before they commit themselves to the euro-zone and give up their own denominations. On talking to some of them recently, it seems that they will probably favour a kind of semi-fixed relationship with the euro, not unlike what went on under the old deutschmark zone. That system existed exactly so that a number of smaller European countries could keep their currencies roughly in line with the then all-powerful deutschmark.
	That is all right for those which have not joined. For those which are in already, as has rightly been said, the exits are not nearly so easy. In fact, if Italy tries to disengage, the immediate effect would be to make its borrowing very much more expensive. Furthermore, a very large number of people in western Europe, including politicians, have invested heavy political capital as well as personal commitment in making the single currency work.
	All that suggests to me that while the euro may lose some of its shine, it will probably survive for some years in a more modest form, possibly within a currency union covering France, Germany, Belgium, Spain and maybe Italy if it can get a strong enough government to impose reform. It will be a zone of relatively slow growth and weak competition, possibly protecting itself increasingly with barriers against rising Asian challenges and other cold and unwelcome trade winds.
	Eventually, of course, that will lead to falling living standards and impoverishment. But—one must be realistic—the process could take many years. In the mean time, all those countries will remain very pleasant and delightful places to visit and in which others can holiday and in which the euro currency can be used in an atmosphere of tranquillity, free from the cold winds of Anglo-Saxon competition and other unwelcome outside forces.
	I end by saying that if that is the way these once great European nations wish to manage their decline, who is to say that they are wrong to choose it, if they so wish? All I would add is that it is not for us.

Lord Harrison: My Lords, before the noble Lord sits down, will he reiterate his point about criticising "widely divergent" economic activity? I thought that was the mark of a dynamic market, not a failure of a market.

Lord Howell of Guildford: My Lords, I think that the noble Lord has missed the point. What the OECD is worried about—it was its remark, not mine—is that the German economy is doing extremely badly and the French economy is in a coma, whereas Ireland is booming ahead. Some of the new accession countries are doing extremely well. Italy is in a desperate state. Their requirements in terms of monetary and fiscal balance and, indeed, in terms of interest rates have diverged enormously. That puts an intolerable strain on a system that has only one interest rate. That is the point it is trying to make.

Lord McKenzie of Luton: My Lords, I start by thanking the noble Lord, Lord Dykes, for initiating this debate and wish him, like other noble Lords, a speedy recovery. I thank the noble Lord, Lord Roper, for stepping in at short notice and so expertly. I also thank all noble Lords who have participated in today's debate. As others have said, it rounds off a week in which Europe has been at the centre of our deliberations.
	I should particularly like to congratulate my noble friend Lady McDonagh on her excellent maiden speech. Her impressive career of course encompasses, as she pointed out, a very successful period in one of the UK's toughest assignments—as General Secretary of the party that we share. I have no doubt that her skill and experience in that and in other fields will be brought to bear in our work in the future. I look forward to that.
	This has been an interesting and useful debate. A number of important points have been raised. The Motion asks the House to call attention to current trends and developments in the euro. By virtue of this debate and the issues covered by noble Lords, we have indeed given due attention to the subject matter in question.
	We have had a full range of views—those clearly in favour, those clearly against and one or two perhaps in the middle. At the heart of our debate must be the analysis that Europe's and the euro-area's low growth and current economic performance stem from structural policy weaknesses. Those challenges were referred to by a number of noble Lords—the noble Lords, Lord Biffen and Lord Taverne, and my noble friend Lady McDonagh. The noble Lord, Lord Howell, made the interesting point that we are making the same kind of analysis; we may not draw the same conclusions in all respects.
	The right policy response is therefore the pursuit of structural reform to promote employment, raise productivity and increase flexibility in labour, product and capital markets. That flexibility should be pursued alongside fairness to create opportunity for all in a globalised economy.
	Economic and monetary union (EMU) puts an additional premium on structural economic flexibility, since to be successful in monetary union countries need even more flexibility to adjust to change and to unexpected economic events in the absence of monetary policy levers at the national level.
	Alongside EMU, global economic change and the challenges of ageing populations underline even more the importance of rising to the reform challenge and enhancing economic flexibility and adaptability. We are part of a rapidly changing global economy. To improve its economic performance relative to the US and match the recent growth rates of other successful developed economies such as Canada and Australia, Europe must take urgent action to promote employment, raise productivity and increase flexibility in labour, product and capital markets.
	The noble Lord, Lord Biffen, quoted the noble Lord, Lord Lawson, on the need for a pause, which he hoped would be extended. I put to him that the issues that global economic challenges bring mean that that pause cannot be too long. We need to act now. We need to get that debate under way and we need to get action under way.
	The Lisbon programme of economic reform has been refocused by EU leaders on promoting growth and employment. Those are the areas in which Europe most needs to succeed in order to preserve fairness and compete in a global economy that puts a premium on skills, innovation and flexibility.
	In summing up, I turn to some of the detail of the issues that have been raised. The Government's policy on UK membership of the single currency was set out by the Chancellor in his Statement to Parliament in October 1997. It remains unchanged. In principle, the Government are in favour of UK membership; in practice, the economic conditions must be right. I do not believe that that can reasonably be interpreted as staying well clear.
	My noble friend Lord Harrison highlighted benefits of price transparency; elimination of exchange risks; and the single market and its benefit to consumers. The macro case was made by my noble friend Lord Peston and referred to by the noble Lord, Lord Taverne.
	The determining factor underpinning any government decision on UK membership of the single currency is the national economic interest and whether the economic case for joining is clear and unambiguous. The Chancellor's Statement to the House of Commons on 9 June 2003 on UK membership of the European single currency set out a reform agenda of concrete and practical steps to address the policy requirements identified by the June 2003 assessment. Budget 2005 reports on progress include the introduction in December 2003 of a symmetric inflation target as measured by the consumer prices index—CPI inflation has been within one percentage point of its target since its inception; reforms to address both supply and demand in the housing market through implementing a programme of change to increase supply and responsiveness of the housing market, as recommended in the Barker review, and action taken in response to the Miles review on the mortgage market; reforms at national, regional and local level to enhance the flexibility of labour, capital and product markets in the UK.
	Those reforms are right for the British economy in any event. They will also assist the process of achieving sustainable and durable convergence and the flexibility necessary for Britain to succeed sustainably within the euro-area. Although the Government do not propose a euro assessment to be initiated at the time of Budget 2005, the Treasury will again review the situation at Budget time next year, as required by the Chancellor's June 2003 Statement.
	The Government also continue to pursue the objective of a European stability and growth pact that takes into account the economic cycle, debt sustainability and public investment. Greater focus on reducing debt and maintaining low debt, with the flexibility for low debt countries such as the UK to invest in provision of public services, has our strong support.
	Several noble Lords commented on the state of the stability and growth pact. The noble Lord, Lord Roper, commented that he thought that concerns about its application and suggestions that larger states were ignoring it were at the heart of the Netherlands' referendum outcome. The noble Lord, Lord Rees-Mogg, said that it was critical and not operating in practice. The noble Lord Taverne also referred to it.
	We need to put it in context. Obviously the Government would not comment on the fiscal position of any particular member state, but to suggest that the pact is dead is incorrect. The treaty remains unchanged; the 3 per cent and 60 per cent debt reference values remain unchanged. As the ECOFIN agreement states, the Council and Commission are resolved to preserve and uphold the reference values of 3 per cent and 60 per cent of GDP as the anchors of the monitoring of the development of the budgetary situation. As set out in the treaty, if a member state's deficit rises above 3 per cent the Council will assess whether an excessive deficit exists based on relevant factors. That remains unchanged. I can tell the House that nine member states, including three euro-area countries and six new member states, are currently at different stages of the excessive deficit procedure.
	At present, although some member states are performing relatively well, as a whole Europe is losing ground in comparison with key developed economies and unemployment remains high. Why is that? Since 1996, annual average growth in GDP per capita in the euro-area has averaged about ½ per cent less than in the US. In 2004, real GDP growth in the euro-area was less than half that in the US. Stronger growth in non-euro-area countries—Sweden, the UK and the new member states—boosted growth for the EU 25 as a whole to about 2½ per cent in 2004, compared to 4½ per cent in the US. As a whole, Europe's growth rate still lags behind those of its main competitors.
	As a result of that persistent gap, the gap in living standards between the US and the EU 15 has widened back to above 30 per cent. Growth accounting analysis suggests that Europe's labour market performance explains around two-thirds of Europe's gap in living standards with the US; the remaining third can be attributed to Europe's lower productivity levels.
	Increased employment is the best route to social cohesion. Despite recent efforts to boost employment and marked success in some member states, especially in raising female employment, inactivity rates remain high, with about 93 million inactive people of working age across the EU 25. The employment rate of older workers remains especially low and well below that of major competitors such as the USA and Japan.
	Moreover, at around 9 per cent, Europe's unemployment rate is considerably higher than that in the US and Japan, leaving 19.5 million people unemployed. In 2004, unemployment rates averaged close to 10 per cent in Germany, 9 per cent in France and 8 per cent in Italy. Much of that was due to long-term unemployment, reflecting labour market rigidities. Nearly 50 per cent of the unemployed in Germany and nearly 60 per cent in Italy are out of work for more than a year, compared with less than 10 per cent in the US and Canada. That reverses a long-standing European strength.
	Raising productivity levels will also be crucial for Europe to improve its long-term economic performance and living standards. Europe underperforms the US in terms of both output per hour and output per worker, and the gap has been widening since the mid-1990s, reversing the trend of catch-up with US productivity levels during the three decades following the Second World War.
	Recent analysis suggests that the underlying causes are largely structural, reflecting a failure to boost services productivity; the relatively small size of the EU's ICT-producing sector; and the EU's larger share of low-productivity non-ICT-using or ICT-producing manufacturing industry. That points to a clear need for further action to promote the key drivers of productivity: increasing product market competition; enhancing the EU's frameworks for innovation and enterprise; and upgrading the skills of both existing workers and new entrants to the labour market so that they can exploit the opportunities of new technology.
	In its May 2003 review of monetary policy strategy, the European Central Bank stated that it would aim to maintain inflation close to 2 per cent in the medium term. To date, euro-zone inflation has remained near, and in recent years above, 2 per cent and deflationary risks have not materialised.
	The ECB framework is very young and continues to evolve. The operation of monetary policy needs to be seen as an evolving process in which both the ECB and markets are learning. Since it took control of monetary policy, the ECB has made several changes, including the biennial publication of staff macro-economic projections and moving to monthly rather than fortnightly decisions on interest rates. Inflation and output have been relatively stable in recent years, with output fluctuating less in the recent downturn than it did in the 1990s. My noble friend Lord Peston made that point.
	Noble Lords raised several points about the ECB. My noble friend Lord Harrison probed the mandate of the ECB. As he rightly identified, its primary objective is to maintain price stability but, without prejudice to that objective, it should support the general economic policies of the Community. His point was that greater emphasis ought to be placed on that. I agree.
	My noble friend Lord Peston referred to secrecy, and certainly it should not be an insuperable issue to publish even the minutes on an anonymous basis. The issue of a symmetric target for inflation is also important.
	The advent of EMU is itself a driver for pursuing structural reform and enhancing economic flexibility, especially in the euro-area. To be successful in monetary union, countries need even more flexibility to adjust to change and to unexpected economic events, once their ability to vary their interest rates and exchange rates has gone and the euro and the single European interest rate are in place. There is the need to tackle unemployment and inflexibility to make sure that Europe as a whole is able to withstand any shocks that arise.
	EMU membership therefore puts an additional premium on ongoing reform of EU labour, product and capital markets. In this context, the Government will continue to argue that employability, flexibility and stronger competition policies must be a top priority, so that EMU can be sustained. It is important to enhance the flexibility and dynamism of the European economy and build on the achievements to date, if the full benefits of EMU are to be realised. That will be particularly important as EMU expands to take in the new member states that joined the EU in 2004.
	Several noble Lords entered into the debate about whether monetary could go successfully only hand in hand with political union. The noble Lord, Lord Roper, referred to the factors that would need to be in place if that were not to be the case, as did the noble Lords, Lord Taverne and Lord Howell of Guildford. The noble Lord, Lord Rees-Mogg, probed the point in his contribution. Our position is that they need not go hand in hand, but fiscal and monetary discipline is extremely important in the absence of those processes. The noble Lord, Lord Taverne, said that political union was dead; I think that is right.
	Alongside EMU, global economic change further underlines the importance of rising to the reform and flexibility challenge. The global economy is undergoing dramatic change, brought about by rapid technological change and the falling costs of communication; by the increasing ease with which goods and services can be subdivided and traded between countries and continents; and by the market reforms in large emerging economies such as China and India that enable them to seize the opportunities that come from closer integration into the global economy.
	Europe must act to tackle persistent low growth and to realise the full benefits of globalisation. Some policies that proved successful in the era of post-war catch-up are no longer appropriate in a global environment that demands greater flexibility and competition. Europe must equip its workers with the skills necessary to embrace globalisation. My noble friend Lord Peston addressed that point. To improve its economic performance relative to the US and match the recent growth rates of other successful developed economies, Europe must take urgent action to promote employment, raise productivity and increase flexibility in labour, product and capital markets.
	For a full analysis of the economic challenges facing Europe and how we can best respond to them, I refer noble Lords to the Treasury paper published alongside Budget 2005 entitled Long-term global economic challenges and opportunities for Europe.
	Europe and the euro-area must therefore adapt to the changing balance of global economic activity and the rise of fast-growing emerging economies to realise the full benefits of economic and monetary union. In her maiden speech, my noble friend Lady McDonagh stressed the need for change. The 2005 spring European Council agreed a renewed focus on jobs and growth, following the mid-term review of the Lisbon agenda. The Government fully support those conclusions. The opportunities offered by globalisation should not be missed. Through the reforms to which I referred, the EU can capitalize on the growing interdependence of the global economy and stimulate growth and employment within its borders.
	Our aim is a Europe that looks outwards rather than inwards and advances the pace of structural reform to meet the challenges of globalisation. The UK aims to work closely with its European partners to achieve that aim during its presidency of the EU. My noble friend Lord Peston made the point that, if we were not in the euro, we would lose influence; I believe that we gain influence if we are making the arguments and talking about modernising Europe, as the Prime Minister did this morning in his powerful speech to the Parliament.
	Key to the success of the EU economy will be a risk-based approach to the enforcement and implementation of regulation. A risk-based approach including competitiveness testing, simplification of existing legislation and alternatives to regulation will minimise the burden of regulation on business. The noble Lord, Lord Biffen, touched on the impact of regulation and, I think, prayed in aid Harold Wilson for the point that he was making. The concept of a risk-based approach to the enforcement and implementation of regulation is designed to attack that issue.
	Member states should take urgent action on labour market reform; further regulatory reform; steps to create a dynamic and competitive single market; knowledge and innovation and enterprise for growth; and on the importance of external openness to trade and investment as a driver of growth and productivity. Member states should set out how they aim to deliver those objectives in their Lisbon national reform programmes later this year. The issue of whether a single market is a correct aspiration was raised by the noble Lord, Lord Biffen. My noble friend Lady McDonagh talked about how a single market was not inconsistent with social justice and how economic prosperity and social justice could go hand in hand.
	Although some member states are performing relatively well, as a whole, Europe is losing ground in comparison with key developed economies, and unemployment remains high. In 2004, real GDP growth in the euro-area was less than half that in the US. The underlying factors contributing to Europe's low growth and economic performance stem from structural policy weaknesses, and therefore the right policy response is the pursuit of structural reform.
	EMU and global economic changes respectively place an additional premium on flexibility in order to adjust to change and to unexpected economic events and to compete effectively in the global economy. Against that background, the Government have set out an agenda for European economic reform for the UK presidency of the European Union. It is by addressing that reform agenda that the main economic challenges can be dealt with.

Lord Roper: My Lords, I begin by expressing my gratitude for the good wishes to my noble friend Lord Dykes expressed by so many participants in the debate. I go on to congratulate the noble Baroness, Lady McDonagh, on what, I thought, was an outstanding maiden speech. She spoke about her background but also addressed the issues that we are considering today.
	I feel that it has been a useful debate, in spite of what the noble Lord, Lord Peston, said about us wasting our time; I thought that we wasted it rather well. I thank the Minister for his full reply and all those who took part in the debate, which was surprisingly non-polemical. At times, it seemed more like a seminar than a debate. I am grateful for that. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.

Bangladesh

Lord Avebury: rose to call attention to the level of political and religious violence in Bangladesh; and to move for Papers.
	My Lords, human rights in Bangladesh have not been high on the agenda of the media or the public in this country, in spite of the close historical, sporting and cultural ties between our two countries. The Economist observed last week that the problem was,
	"among the most sparsely covered by the international press".
	It explained that that was partly because the Government there made it hard for international journalists to visit and partly because, when they did visit, the Government did not like what they wrote—in particular, the recent suggestions that the country was seeing a rise in Islamic extremism and was becoming a haven for international terrorists.
	The biggest headache for western diplomats in Dhaka, the Economist says, is whether democracy can survive and whether the elections scheduled for 2006 will be held. The main opposition party, the Awami League, threatens to boycott the polls, in the face of a rising tide of violence against its leaders and supporters.
	The Home Office was forced to take Bangladesh off the so-called white list of supposedly safe countries to which asylum seekers could be returned without the right of an in-country appeal when the High Court ruled in February, after an exhaustive survey of the evidence, that no rational decision-maker could have been satisfied that there was in general in Bangladesh no serious risk of persecution. The FCO's latest human rights report describes Bangladesh as the second most dangerous country in the world in which to be a journalist. Even at a distance, one can see that reflected in the paranoia of the reaction to an attempt to hold a rational discussion of the rise of extremism, intolerance and violence, particularly as they affect religious, ethnic and political minorities, as well as secular and progressive groups. Last Friday, a steering committee under my chairmanship convened a one-day meeting at SOAS to discuss the matters. We understood that the high commission had protested to the Foreign Office about the holding of such a meeting. The noble Lord may be able to assure us that it was told that, in this country, the Government have nothing to say about any lawful discussions, including those concerned with human rights. Just for the record, we invited the high commissioner and four other people representing the Bangladesh Government to participate. We gave them two 10-minute slots in the plenary session compared with only one for all other groups, including the official opposition.
	The high commissioner was heckled when he said that there was no violation of human rights in Bangladesh; that many MPs belonging to the main party now in government—the BNP—were assassinated during the 1996–2001 Awami League terms of office; and that the rise of Ahmadiyya Muslims was not so important because there were only a small number of them compared with the majority Sunni population. But, in spite of those provocative remarks, order was maintained by the chair and the high commissioner was allowed extra time to compensate for the interruptions.
	When the second government speaker in turn exceeded his allotted 10 minutes and refused to obey the chair's ruling that he should sit down, the high commissioner and his group—twice as many as the number that we had officially invited and in spite of being told in writing three times that we could not accept the additional nominations because of the limited capacity of the hall—created a disturbance and then walked out. He subsequently issued a false statement claiming that the meeting had broken up in disarray, when, in fact, it continued peacefully until 18:00 hours as scheduled.
	By walking out, the high commissioner's group forfeited the chance to participate in the afternoon workshops, which were very useful in focusing on particular aspects of the problem; namely, human rights in general, the persecution of minorities; the rise of religious extremism and the threat to secular democracy; and international aspects, including the role of donors and international NGOs.
	I believe that this was the first time that an attempt had been made to look at the situation of all of the besieged minority groups together and, if possible, to point to ways of halting the downward slide to anarchy, lawlessness and repression. The participants all agreed, apart from the Bangladesh officials, that it was an outstanding success. They were enthusiastic about setting up a network that will continue the work of the conference, as I hope Ministers will have seen from the resolution, a copy of which was sent to them.
	We would have liked to hear from the two official spokesmen how they saw the key governance challenges that they face and how best outside assistance could help to address them. That was the subject of a meeting held last February in Washington between members of the donor community, including the UK, US, EU, World Bank and the Asian Development Bank. Since then, I know that the UK and the European Union have raised further concerns with Dhaka. Unfortunately, it was as if none of those had registered with them.
	The British high commissioner in Dhaka only a few weeks ago expressed concern over the lack of progress in the investigation of an attempt on his life, in which three people died, and over the continuation of similar attacks. He mentioned the increased aid that the UK is giving for police reform, which is part of a package that makes us the biggest donors—larger even than the World Bank. Will the Minister say whether, as Mr Choudury suggested, aid can be deployed effectively to improve the law and order situation in the absence of much firmer leadership from the Government, in a situation where we have, as one participant describes it,
	"the politicisation of the Civil Service, undermining of the judiciary and utilisation of the security forces to promote narrow party interests"?
	The UK has repeatedly pressed Bangladesh to investigate terrorist crimes and to bring those responsible to justice. The dreadful murder of Shah A M S Kibria, the distinguished former Minister and ambassador to the UN, and the failure of the authorities to take the steps that might have saved his life, was only the latest in a series of outrages, which included attempts on the lives of the Leader of the Opposition in August 2004 and, of course, on our high commissioner earlier in that year.
	The Bangladesh high commissioner did not mention the belated request that I understand has been made by his Government to Interpol and the FBI for help in tracking down "terrorists sheltered by a foreign intelligence agency" allegedly responsible for the killing of 21 people in the attack on the Leader of the Opposition's rally last August or the improper release of confessions said to have been made by two people held in custody for those offences, although neither of them has been taken to court. Some of us saw those moves, and the orders issued to law enforcers to strengthen their efforts to arrest known terrorists, as preliminary results of the conference. Can the noble Baroness in her reply say whether we have received any requests for help in the detection of those crimes? If so, what reply have we made?
	Even if they convict a few terrorists, that will not deal with the larger penumbra of religious and communal hatred which has inspired attacks on secular organisations, such as the Grameen Bank and the Bangladesh Rural Advancement Committee, which have made significant contributions in the past towards the country's development, the Ahmadiyya Muslim community's mosques and members, and places of worship belonging to the Hindu, Christian and Buddhist communities.
	In some of those attacks the police actively collaborated with the bigots. I hope that the training we provide for the police will help them to enforce the law more impartially. But what can we do as presidency of the EU from next week to raise the pressure on Dhaka, not just to end terrorist atrocities and improve the performance and behaviour of the police, but to stamp out the hatemongers who create the climate in which the terrorists thrive?
	The UN Rapporteur on Religious Freedom reported to the Human Rights Commission in March on the killing of an Ahmadiyya Imam, a Hindu priest and a Buddhist monk, as well as other sectarian outrages and threats. The Government's response has been merely to reiterate that freedom of religion is guaranteed by the constitution while, at the same time, they have banned publications by the Ahmadiyya Muslim community.
	The Government have indeed banned two extremist bodies, but not the International Khatme Nabuwat Movement Bangladesh, whose members incite to violence against the Ahmadis, as we saw in a terrifying video that was shown at the conference on Friday. There is no law in Bangladesh forbidding incitement to religious hatred. If there is a law against incitement to commit other substantive criminal offences, it is not enforced against religious fanatics. An informer from another extremist group—the Jagrata Muslim Janata Bangladesh—told the police that that group was engaged in a systematic campaign against cultural activities considered to be non-Islamic.
	Former Minister, Professor Abu Sayed, claims that camps have been established in Bangladesh for the training of thousands of militants, with the assistance of coalition partner, Jamaat-e-Islami, and that these groups were infiltrating public departments and civil society with the aim of launching an Islamist revolution. He is not the only person to have made those allegations. But the response of the police is not to investigate those charges, but to raid the professor's house and to confiscate books on the rise of communism and extremism.
	The UN Special Rapporteur on Extrajudicial Executions said that he has received no substantive response to the three communications sent to the Bangladesh Government about killings by the rapid action battalion. Representations by Amnesty International have also fallen on deaf ears. Amnesty International says that the RAB killed 147 people in 2004. It talks about a growing tide of violence on members of the Opposition and on public places such as cinemas.
	Our conference heard from representatives of the indigenous peoples of the Chittagong Hill Tracts where the 1997 peace accords have not been implemented as the CHT ministry has now publicly acknowledged. The people are steadily being deprived of the ancestral lands which have belonged to the Jumma people from time immemorial. The very demography of the CHT is being changed under military occupation. The commission set up to resolve land disputes has never been activated. The attacks on tribal people in 2003, which involved killings, rapes and the burning of hundreds of homes, have not been properly investigated, like all of the preceding atrocities over many years.
	Violence against the press is on the rise. The US ambassador says that journalism is the most dangerous profession in Bangladesh. In the past 12 months, more than 400 journalists have received death threats, 320 have been tortured and five have been murdered, including Mr Golam Mahfuz, deputy editor of a daily paper, who was stabbed to death less than a month ago. The editor and publisher of a former weekly tabloid were charged with sedition and the publisher spent 17 months behind bars before he was given bail.
	Apart from the perilous situation of the religious and ethnic minorities, violence against women and children in Bangladesh has reached an unacceptable level and the court system is stacked against the victims, as the Daily Star of Dhaka noted last Sunday. The Government do not enforce laws prohibiting discrimination against women, minority groups and people with disabilities. Bangladesh is an increasingly dangerous and threatening place for them as well as those belonging to minority faiths, ethnic groups, opposition parties and secular organisations.
	At the root of all those problems lies the cancer of extremism. Bangladesh is at the front line of the war against terrorism fuelled by a maverick branch of Islam that aims to transform the country into a Taliban-style dictatorship. But instead of acknowledging the threat to the country's stability and acting vigorously against the peddlers of hatred and violence, the government pretend that nothing is wrong. They have colluded with extremist groups and failed to defend the rights of vulnerable people, in spite of repeated pleas by the Foreign Office, the US State Department, the European Union and the agencies of the Human Rights Commission. They have managed to keep a relatively low profile in Europe, compared with other hotspots in the world, in spite of the danger that such bigotry and hatred, if allowed to fester in Bangladesh, could spread outwards from the sub-continent to the rest of the world including Britain.
	The British Government and the people of this country must support embattled minorities and human rights defenders, and build solidarity in the struggle to preserve their vanishing freedoms. We must fashion a coalition for liberty that spans all people under threat and their allies throughout the world. I beg to move for Papers.

Baroness Uddin: My Lords, I thank the noble Lord, Lord Avebury, for bringing Bangladesh to the attention of the House. From the outset we have been well briefed on the debate. I thank all sections of the community that have provided us with extensive information. I shall make no apology for borrowing some of their comments, so I ask noble Lords not to cry foul.
	I also thank the noble Lord, Lord Avebury, for detailing some of the issues. To a certain extent, like other noble Lords, I shall merely add to his remarks.
	On a lighter note—if that is possible given the subject of the debate—I congratulate the Bangladesh cricket team on defeating Australia. I am glad that England also did very well at Trent Bridge on Tuesday. As always, I have two perspectives on this debate, which I shall come to shortly. Most of our household supported England while my husband and I hung by a thread in support of Bangladesh, so I am glad that they did not let us down. There lies the dilemma in taking part in this debate. I do not recall the previous debate in this House on Bangladesh, to which the noble Lord referred. As noble Lords may be aware, although Britain has been my home for more than 30 years, I was born in Bangladesh. I have regarded it as sufficiently important to spend all my spare time there and to encourage my children to visit whenever my purse allowed.
	I confess that, apart from a deep sense of family belonging, I have avoided, at all costs, becoming embroiled in the goings-on in Bangladesh. That is not to say that I do not acknowledge that what happens there deeply affects the Bangladeshi community in the UK, in which I am totally submerged.
	I came here as a 13 year-old, just after the civil war, when Bangladesh was led to victory under the leadership of Sheikh Mujibar Rahman, who is respected as the father of the nation. Much of my resilience, tenacity and ideals come from having witnessed the torture, rape, killings and utter destruction of that conflict. The knowledge that oppression, however minuscule, is totally unacceptable drove me to become engaged in fighting against prejudice and bigotry in Tower Hamlets and elsewhere.
	My contribution today comes from a deep love for my birthplace, wanting it to do well at all costs. The way in which Bangladesh has been seen this week within the Westminster village—with the historic defeat of Australia, a meeting held in the House by the Hindu Council on the treatment of that minority group, the conference chaired by the noble Lord, Lord Avebury, on human rights and the rise of violence, and now this debate—has come as a mixed blessing.
	For many seeking international attention on Bangladesh, these opportunities are an invaluable way of acknowledging the amazing progress that it has made in its relatively short existence. Bangladesh has a lot going for it, for which all political parties can take credit: continuing democracy and Bangladesh's steady economic growth of more than 5 per cent. The struggle for freedom and democracy in Bangladesh achieved a hard-won multi-party system of political representation in 1991. There have been elections and a peaceful transfer of power between political parties twice since then.
	Bangladesh has come a long way since its birth in 1971. Despite the countless lashings of Mother Earth and all the difficulties associated with civil war and climate change, the country has become self-sufficient in food provision. It has dramatically cut its population growth rate and increased access to education, particularly for girls. That is remarkable by any stretch of the imagination. Bangladesh is rightly proud that it is no longer dependent on international aid, and the micro-credit success stories have been acclaimed and acknowledged internationally.
	The life expectancy of men and women has increased, and education and economic opportunities have expanded for Bangladeshi citizens. NGOs are encouraged, by and large, to play an important role, particularly in the empowerment of women. Bangladesh should also be rightly proud of its history of a free and active press. I acknowledge the contribution of the noble Lord, Lord Avebury, on the FCO's comment, which is deeply worrying for everyone.
	On the international stage, Bangladesh is the second largest contributor of troops to UN peacekeeping forces. It has demonstrated a strong commitment to international peace and security through the deployment of more than 8,000 peacekeepers worldwide. They enjoy a well-earned reputation for discipline and effectiveness. Those are huge national achievements; they are the achievements of all Bangladeshi people.
	Throughout, of course, Britain has stood shoulder to shoulder with Bangladesh. That friendship and understanding is centuries old, with Britain and Bangladesh working together in politics and trade, as well as cultural and countless social interchanges. We remain the largest single investor in Bangladesh, with more than 50 UK companies doing business there.
	The UK is at the forefront of Bangladesh's efforts to help to combat poverty and meet the millennium development goals. It contributed £29 million to provide flood relief last year.
	The attack in Sylhet on our High Commissioner, Anwar Choudhury, in May last year was absolutely shocking, and the subsequent attacks on the mayor in Sylhet, in August; on the Awami League and the opposition leader, on 21 August, with the subsequent death of a prominent female leader, Ivy Rahman; and, as the noble Lord, Lord Avebury, mentioned, on a well-respected UN ambassador and former Bangladeshi finance minister, have rightly led to widespread international condemnation and concern. The perpetrators remain at large, which has propelled an outcry in both Bangladesh and the international community. I hope that the Government of Bangladesh will want to do more than provide assurances that those attacks are being taken seriously and that they will be dealt with using the full force of the law.
	No one, most of all the perpetrators of such crimes, should be left in any doubt that violence of such a magnitude will not be tolerated in a democratic country, albeit a young one. So the statistics compiled by various human rights organisations on human rights abuse allegations in Bangladesh make for very grim reading. Bangladesh is rightly judged alongside all other countries according to how it treats the most vulnerable in society. It too must be treated equally. I hope that there is consensus that, without respect for universal human rights, there is no potential for democracy to grow.
	As I was growing up in this country, I believed that there was a clear demarcation between right and wrong— perhaps I was seeing it through the tinted vision of youth—but, in my latter age, the global context has shifted and, however much we dislike it, there are several indications that there is no parity of treatment on the issue of human rights abuse. It seems to be applied in different contexts and according to different standards of behaviour. There is a perception in Palestine and elsewhere that we have allowed a free-fall in standards while overstraining our sense of justice to accommodate those who are regarded as "friends". We have to have an internationally agreed basic human rights principle and an understanding that freedom of speech and a right to religious expression are fundamental to all of us.
	In this regard, as has already been said, I know that there is rising concern about the level of continuing violence in Bangladesh—not least because there is a wide-ranging consensus on the fragile law and order situation, which has meant that the implementation of the rule of law, particularly by the special forces known as RAB, is counter to good practice.
	Good governance has to be practised at all levels in order to create confidence in the communities and internationally. From that point of view, whether it is from the policeman on the street, from the local district administrator or from the top levels of government and the judiciary, we require assurances. While RAB is regarded as being present by popular demand, it perhaps demonstrates that the country's force of law is not able to function properly in the usual way.
	It has been reported that the British High Commissioner in Bangladesh commented recently that he hoped that, if apprehended, the perpetrator of the grenade attack on him in Sylhet would not be killed in cross-fire. There is deep concern that cross-fire is one of the tactics used by RAB, for which it has become well known.
	These debates are taking place in the context that we now live in a global world and are no longer able to be comforted that what we do in our own country is our own business. I add here a caution that those who live in glass houses should not throw stones. Globalisation is rapidly transforming the way in which we live and strong governance, a respect for human rights and law and order are prerequisites for development and growth. We have become world citizens. I hope that everyone involved in the welfare of Bangladesh will accept that debate in the public arena is a positive and that there is no need to be defensive when things are not as they should be.
	One of the primary reasons for the lack of progress in many arenas of Bangladesh is that the two main parties remain at loggerheads, thereby leaving Parliament in limbo and people in doubt about the seriousness of the commitment to continue building democracy. They have nothing to look forward to in the way of role models.
	I hope that there is consensus that international concerns about the shape of the political landscape in Bangladesh should lead to some re-jigging in the light of what has become apparent, and that the Bangladesh Government will recognise that this is having an adverse effect on the perception of Bangladesh internationally, notwithstanding its tremendous economic and social success.
	As has been said, the next election in Bangladesh will be a key challenge. I hope that the political parties can begin to move away from hostile confrontation to a spirit of accommodation, agree basic standards of conduct and abide by them. I look forward to hearing from the Minister what role the UK may play in facilitating this.
	Democratic principles cannot be enforced or made hostage to party politics and personal gain. Surely it is no comfort to the Bangladesh Government that they are continually regarded as a corrupt force. They now have the added baggage of having to defend their actions on human rights violations, particularly against other religious minorities, as well as the accusation that they are harbouring extreme activities among their own.
	I should like to see the Bangladesh Government make it apparent to the world outside that they are seriously concerned about the numerous allegations of violent incidents and abuses taking place against the minority. I hope they will invite a parliamentary group to visit at the earliest opportunity. Opening the doors to a greater understanding and the reality on the ground may go a long way towards giving some answers.
	If left unanswered, these concerns and allegations of corruption and abuse will tarnish the international reputation of Bangladesh and discourage further inward investment, thereby damaging the prospects for long-term prosperity and making ordinary people suffer.
	As the next election looms nearer it is important for Bangladesh to ensure that every step necessary is in place to demonstrate that it can earn the confidence of the world community. No matter how much each of us thinks that what we do is our business, that we can cushion our existence and take comfort from the fact that even the UK and the USA are under scrutiny for their human rights records, there should be no place to hide if we are to live together.
	Bangladesh faces a thousand challenges—all of those to which I have referred and, perhaps, impending water shortages, huge floods, global warming and arsenic poisoning. These should be matters for discussion and attention. I hope that we will not neglect them in the future.
	As a member of the All-Party Group on Bangladesh, I hope that we will take note of the debate today, perhaps forge some links with other Members and work through some of the resolutions put forward by the conference. I also hope that the Minister will look at the resolutions and consider how best to work with the Bangladesh Government to ensure that they are open and transparent when discussing difficult issues such as human rights violations.
	Perhaps I may borrow a quote made by the UN Secretary-General earlier this month. It might not be totally appropriate but, nevertheless, it shows us where we are. He said:
	"Because of globalisation we live in a world of inter-connected threats and mutual vulnerability between rich and poor and weak and strong. No country can afford to deal with today's threats alone and no threat can be dealt with effectively unless other threats are addressed at the same time".
	So, as a daughter of Bangladesh, I ask that we—as friends of the Bangladesh Government and as partners in adversity—promise to work together with mutual respect while, at the same time, explicitly stating that human rights abuse, however small, is the business of all of us. Let us promise that we will not allow Bangladesh or any other country—especially those we regard as friends—to get on with it by themselves.

The Lord Bishop of Coventry: My Lords, I begin by commiserating with the noble Baroness, Lady Uddin, who cannot read her own handwriting. I suspect that I speak for many in your Lordships' House when I say that I cannot read mine either, with or without glasses.
	It takes a certain temerity for a white Anglo-Saxon who has never visited Bangladesh to take part in a debate such as this. I justify it, perhaps, by reminding your Lordships that the City of Coventry, where I live and where I am privileged to serve, has a significant Bangladesh community. This community has given rise to a number of restaurants, which are generically referred to as "Indian" restaurants, where they serve what is generically referred to as "curry". This is one of the huge advantages that we have in Coventry. In passing, I would point out that the curry in Coventry is just as good as that in Birmingham or Leicester, and second only perhaps to that in Bradford.
	When I welcomed two new colleagues to my staff team last week I decided that we would take them out to a meal in a local curry house. Halfway through the meal the manager of the restaurant came up to me and began to tell me the story of his family in Bangladesh. It appears that they are part of the Ahmadi community. As he told the story his eyes filled with tears and he asked me, an Anglican bishop, to pray for him and his family. What I wish to say today is to some extent focused on that community.
	The Ahmadiyya community in Bangladesh is small. Its numbers are estimated at around 100,000 out of a population of some 140 million. As we have already heard, many respected international monitors point to increasing evidence of an orchestrated campaign on the part of Islamist extremists against this small minority. We are hearing stories of mob violence, including attempts to occupy Ahmadi places of worship. Several homes have been destroyed and Ahmadi converts, it is said, are being detained against their will and pressured to recant. The reason for this seems, at one level, quite simple. These people are held to be at best unorthodox in their beliefs and at worst heretical.
	What concerns us today is not merely the attacks on a heterodox Muslim sect in Bangladesh. These are a presenting issue for something profoundly more worrying. We are speaking about attacks on one of the foundations of justice and peace in our world; namely, the right to religious freedom. These attacks are all the more sinister because they appear to be tolerated or even encouraged by the state. Last week the Human Rights Watch accused the supposedly secular government of Bangladesh of being complicit in religious violence. I quote from its report:
	"This is a dangerous moment . . . the authorities have emboldened extremists by failing to prosecute those involved in anti-Ahmadi violence and by banning Ahmadiyya publications".
	All this may sound remote and perhaps of little interest to most of us in the West—that is, until we remember that one of the major pilgrimage centres for this community is in rural Surrey, where 30,000 people gather each summer. So the geographical links to this persecuted minority are not so distant as we might at first think. By all accounts, the largest mosque in western Europe belongs to this community, and is to be found in Morden.
	What should concern us more than geographical proximity is the issue of the state-sponsored oppression of a religious minority. If the violence and intimidation against one small community in Bangladesh is tolerated, whose place of worship or home will next be burned; who will next be beaten? There are already signs that other minority religious groups such as Hindus are beginning to suffer the same kind of violence.
	Precisely because we may be tempted to think of this as an obscure persecution in a far away place, we must redouble our efforts to be intolerant of intolerance. For some, the persecutions of the marsh Arabs in Iraq, or of Christians in Pakistan, or the spiral of violence unleashed in the Great Lakes region, were once similarly obscure and far away.
	I speak as a Christian, but most emphatically not with any sense of moral superiority. I am only too conscious that the Church in this land has in the past engaged in heresy trials which, in their turn, led to institutional violence. Those burnt at the stake or disembowelled for their faith are now generally held by both sides to have been honourable martyrs. We have, thank God, learnt that there is far more that unites us than divides us; but, even more significantly, that our common humanity is a God-given privilege that we despise at our peril.
	Equally, I am not insensitive to issues of doctrinal soundness or orthodoxy. I accept that the Muslim community world wide, both Sunni and Shia, finds abhorrent the idea that a late-19th century prophet should be thought to have superseded the prophet Mohammed as the ultimate messenger of divine truth. For Christians, a parallel might be the arrival of the Mormons, at about the same time, claiming that their holy book somehow trumps the Hebrew and Christian scriptures. Such claims to authority can all too easily divide communities, setting erstwhile friends and neighbours against each other in vicious and violent ways.
	The question we all need to ask, whatever our religious affiliation, is whether violence in the name of God can ever be justified. That very question has formed the basis of some very fruitful dialogue in recent years. It gave rise to the Alexandria Declaration in 2001. That was signed by top religious leaders from the Muslim, Jewish and Christian communities in Israel/Palestine, a process in which the diocese of Coventry was privileged to play a significant part. It led, in turn, to the Baghdad Religious Accord signed on 24 February 2004, in the preface of which the following statement is to be found:
	"According to our faith traditions"—
	this refers to Sunni and Shia Muslims, Christians and Kurds—
	"killing innocents in the name of God is a desecration of the laws of heaven and defames religion not only in Iraq but in the world".
	As ever, words alone are not enough, but I humbly suggest that such an approach is not without merit and might usefully be adapted to other situations, such as that under discussion today.
	I realise, of course, that much so-called religious persecution also has economic, ethnic and political elements. Indeed, power struggles come in many different guises. That may well be the case in Bangladesh, and I would welcome any insights that other noble Lords might have to offer, since such territory is certainly beyond my competence to comment on.
	In concluding, I thank the noble Lord, Lord Avebury, for initiating today's debate. I urge Her Majesty's Government to do all they can to bring pressure on the government of Bangladesh to ensure that basic human rights are observed and that freedom of religious thought and practice is not only tolerated but welcomed.

The Earl of Sandwich: My Lords, the noble Baroness, Lady Uddin, mentioned cricket. The expression on Mohammad Ashraful's face after he had scored his century and Bangladesh had beaten Australia by five wickets in Cardiff last weekend spoke for itself. So did the slogan on his T-shirt, which said "Grameen Phones". A great country, which has always unfairly been seen as a poor relation, first of western Bengal, then of India, then of Pakistan, has now excelled at the highest level of sport and boasts one of the most famous and successful examples of rural development anywhere.
	The Grameen Bank has become a symbol of micro-enterprise world wide, demonstrating how the very poorest communities can support themselves through their own efforts, and how a commercial bank can benefit from low rates of interest and exceptionally high rates of repayment. The poorest, in other words, are shown to be the most financially efficient.
	I saw this over many years when I visited eastern India and Bangladesh several times for organisations such as Christian Aid and CARE. I met the leaders of local NGOs such as BRAC, GK, Nijera Kori and Gono Unnayan Prochesta, which all have an excellent reputation in the aid world. I know that the DfID is involved with BRAC today in a major rural education programme.
	Apart from their business enterprise, I admired the vitality and skills of all the Bangladeshis I met. I saw health workers visiting the poorest families, craftsmen making artificial limbs and spare parts in an industrial workshop, labourers at night school, small farmers and their wives transplanting rice and fishing in ponds. I became nervous riding behind paramedics on their mopeds along slippery dykes, then impatient waiting for a delayed, crowded ferry to carry me across some of the widest rivers in the world.
	The people have endured much, and the many stories of survival and tragedy in successive disastrous floods still haunt anyone who has worked in Bangladesh, let alone lived there. It can be a dangerous place to live, as we have heard.
	Bengalis, east and west, are a highly intelligent, artistic and articulate people, and their strong opinions, while they often enliven democratic debate, sadly sometimes spill over into factional and sectarian violence. The noble Lord, Lord Avebury, has already spoken of the dangers to journalists, the threats to democracy, the human rights abuse and the fault lines between the many political parties and ethnic and religious groups.
	I also learnt that political violence can be at its fiercest at a local level, where the more progressive reforming elements clash with vested interests and local landlords. For example, I visited a clinic where a paramedic had been beheaded for asking too many questions about the causes of poverty.
	But I also remember some remarkable individuals who have helped to build this nation, such as Dr Zafrullah Chowdhury—to mention just one. He was a young medic who, having fought in the independence war, started a people's health centre called the Gonoshasthaya Kendra in a rural area outside Dakar. This health centre was remarkable in itself, training young paramedics in the "where there is no doctor" techniques, but he soon became aware of the political background and the power of the multinational drug companies, which were pricing products way out of reach of the rural poor. With some help from German and British charities, he built a drugs factory alongside his health centre to manufacture only the basic medicines on the WHO list, thereby undercutting the big pharmaceutical companies. Deservedly, he went on to enter politics and became for a time health Minister. He was a man of extraordinary dedication and humanity.
	I mention these things because this has always been a nation of great fascination to me and a country of tremendous potential, character and colour. Yet it is also a country of great vulnerability because of its geographical position and its political weaknesses. It is resilient in dealing with successive natural disasters and very far from the basket case that is sometimes portrayed in the media.
	I should also mention that we in London are fortunate to have such a thriving Bangladeshi community, not to mention the curry, referred to by the right reverend Prelate, which brings this lively culture into the midst of our own.
	I was pleased to hear reference made to the Chittagong Hill Tracts. I would like to mention two minority groups in particular, the Biharis and the Rohingyas. The Biharis are in some ways the equivalent of Palestinians in south Asia. They are victims of racism, religious intolerance and a collapsed empire. Their story is long and complicated. Most of them are descendants of Urdu-speaking Muslim refugees who came to east Pakistan after partition in 1947. Before that, thousands of them were transported from Bihar by the British to build railways and support the administration in east Bengal. In the Bangladesh war of independence, the Biharis sided with Pakistan and have since been understandably resented. Few have been given citizenship, although a High Court ruling two years ago found in favour of one group. The Tripartite Agreement of 1974, which followed the independence war between India, Pakistan and Bangladesh, failed to resolve the problem of the Biharis. More than 30 years later, about 300,000 still live in about 70 camps, in wretched, crowded conditions with inadequate healthcare. They are unrecognised even by the UN as genuine refugees as laid down by the convention.
	As noble Lords will know, the case of the Biharis has at various times been brought up in this Parliament, notably by the late Lord Ennals, who achieved the only conference on the Biharis in Geneva, and by Ben Whitaker through the Minority Rights group and others. Repatriation to Pakistan was discussed, but, as so often, meeting humanitarian need through the UN was the only practical outcome.
	However, Britain seems to have lost any sense of responsibility that it once had. In her reply to the noble Lord, Lord McNally, on 22 May last year, the Leader of the House said that while DfiD's third largest aid programme was in Bangladesh, there was no special support for the Biharis through it. This year's departmental report, which has just been published, makes no mention of them, although I understand that some funding may have become available through the human rights and governance fund. What assistance are Her Majesty's Government giving to the Biharis?
	Some Members of this House have been involved with the Dakar Initiative, which aims to carry out a comprehensive needs assessment of the Biharis in the camps. Apparently, this project was offered to Her Majesty's Government, but nothing more has been heard of it. Will the Government undertake to make inquiries and, if possible, follow up this very worthwhile initiative as well?
	I should also like to bring up the case of the Rohingya, who are a Muslim minority in northern Arakan State in Burma. Here I speak as a council member of Anti-Slavery International. The Rohingya people suffer discrimination in Burma on the basis of their ethnicity and religion and, in Bangladesh, they are unwanted refugees. In Burma, the Citizenship Law of 1982 renders them stateless and their freedom of movement is highly restricted. They are routinely subjected to forced labour, extortion and arbitrary arrest.
	Human rights abuses in Burma, which are the subject of attention in the media today, have led to mass exoduses and a continuous influx of Rohingya refugees to Bangladesh. I understand that 20,000 refugees remain in two precarious refugee camps where the literacy rate is only 12 per cent and chronic malnutrition peaks sometimes at 65 per cent. Last September, the Bangladesh Government formally rejected a UNHCR proposal for self-reliance for these camps. Several incidents took place in Kutupalong camp, starting with a hunger strike in June 2004 and culminating in a violent police raid on 18 November, leaving three refugees dead and 42, including six women, imprisoned on what I understand were fabricated charges.
	Rohingya refugees continue to face intimidation, pressure to sign voluntary repatriation forms and serious abuses in the camps. In addition, the two remaining international NGOs were compelled to withdraw from the camps in the past two years. This raises concerns about the protection of, as well as the quality of humanitarian assistance to, the refugees.
	In Anti-Slavery International's submission to the UN Commission on Human Rights on 15 April, it urged Burma to end its policies of discrimination against the Rohingya and to repeal the 1982 Citizenship Law. It also urged Bangladesh to cease all coercion and harassment of Rohingya refugees, to conduct an independent investigation into the November killings, and fully to implement the recommendations of the joint assessment mission that was carried out by the UNHCR and the World Food Programme last October.
	The noble Lord, Lord Avebury, spoke of building solidarity. May I urge our Government to do their utmost to work with the international community to find durable solutions for both the Bihari community and the Rohingya refugees, instead of simply abandoning them?

Lord Dholakia: My Lords, I thank my noble friend Lord Avebury for this debate. He has a distinguished record of addressing human rights issues, and he has been fearless in his critique of regimes which abuse the rights and liberties of individuals. I am aware that many people are alive today because of the intervention of my noble friend Lord Avebury on their behalf. I have travelled to many countries, but have always found that my noble friend has been there before me. He has a deep knowledge of the issues that we are debating and the Government should take very serious note of what he had to say.
	Perhaps I may also put on record my thanks for the very balanced contribution of the noble Baroness, Lady Uddin. She identified the issues of concern, but she also mentioned the progress that the nation of Bangladesh is making. More importantly, her stand on human rights issues is most welcome. We should be equally grateful to the right reverend Prelate the Bishop of Coventry and the noble Earl, Lord Sandwich, for their contributions.
	Bangladesh has had a difficult birth. It was originally a part of Pakistan, but those two states are now separated by 1,000 miles at the two extremes of the Indian sub-contintent. Bangladesh's struggle to become an independent nation was undeniable—and that is precisely what happened. I do not believe that it is necessary to dwell on history, but suffice to say that the dreams of an effective democracy in Bangladesh have not been fully realised. I had the opportunity to meet Sheikh Mujibar Rahman when he was released from prison in Pakistan and flew to London. He was a man of great stature, who was determined that Bangladesh, with its unique culture, would pull itself from the turmoil of the struggle for independence and build a nation in which the rule of law would prevail.
	I love Bangladesh and have many friends there, and I was deeply touched when I was invited to chair the afternoon session of the European human rights conference on Bangladesh, held last Friday at the University of London, in which my noble friend Lord Avebury participated. It was not an easy job; emotions were running high; and it did not help when people in authority denied that there was any violation of human rights there. As I have always said, if there are issues we should not be squeamish about them but should take the necessary action. With all the evidence available and documented, it was difficult to accept the statements made by some of the officers. Despite all that, it was a good conference with ample opportunity for a constructive approach to problems in Bangladesh.
	But I have another worry. There is a large law-abiding Bangladeshi community here. They have struggled hard to build an economic base and contribute substantially to the revenue in this country. They were the last people involved in large-scale migration to the United Kingdom, and despite adversity they have come out well. They also have close relations in Bangladesh, so we should be mindful that what happens in Bangladesh has repercussions in the Bangladeshi community here. We ignore that at our peril.
	So what are the issues that concern us all? I have studied mountains of documents, and there are matters that need addressing. Briefly, they fall under the following categories: the prosecution of religious minorities, as the right reverend Prelate the Bishop of Coventry, said; extra-judicial executions and custodial deaths; attacks on the media, educational institutions and students; violence against women; allegations of political assassinations; political persecution and torture; evidence of terrorism and growing extremism; and the security and safety of citizens.
	I deplore human rights abuses arising anywhere in the world, because as part of the global community what happens in one part of the world has an impact on all of us.
	I turn now to the plight of the minorities in Bangladesh. In a Written Answer to my noble friend Lord Avebury, the noble Baroness, Lady Symons of Vernham Dean, replied:
	"We are concerned about the increasing level of political and extremist violence in Bangladesh and the dangers this holds for Bangladesh. We raise these concerns and the need for effective action to ensure that those responsible are brought to justice on a regular basis with the Bangladeshi authorities and will continue to do so".—[Official Report, 7/3/05; col. WA56.]
	In a Written Answer to a Question by Jeremy Corbyn in the other place, the Minister, Mr Alexander, replied:
	"We have serious concerns about the security and law and order situation in Bangladesh. The Bangladeshi Government need to take effective action to bring those responsible for violence to justice".
	Mr Alexander added:
	"The large majority of recent attacks have been directed at political and civil society rather than against British or other foreign nationals".—[Official Report, Commons, 4/3/05; col. 1441W.]
	Again, in answer to another Question from Mr Drew on 8 February this year, Mr Alexander replied:
	"We continue to be concerned about the situation of religious minorities, including Hindus and Christians, in Bangladesh. I raised these concerns with the Prime Minister, Khaleda Zia, on 21 December during a visit to Dhaka. We regularly raise issues of religious persecution and intolerance with the Bangladesh authorities, both bilaterally and with EU colleagues. We urge them to ensure minorities are suitably protected, that all incidents are promptly and fully investigated, that the perpetrators of crimes against religious minorities are brought to justice and that firm action is taken against incitement".—[Official Report, Commons, 8/2/05; col. 1453W.]
	So what are these allegations? Let us examine the situation in the context of Hindus, Christians, Buddhists and the Ahmadiyya communities. Religious persecution is having a devastating effect on their freedom to practise their faith. It is damaging their culture, and there are numerous examples of families uprooting themselves from their place of birth. You simply have to look at the exodus from Bangladesh.
	The Amnesty International report dated 1 December 2001 is quite explicit on the subject. It says:
	"The killing of a prominent member of the Hindu community appears to be connected to the current wave of attacks on Hindus. On 16 November, Gopal Krishna Muhri, principle of Nazirhat College in Chittagong, was shot dead at his home. The circumstances surrounding his killing point to the strong possibility that he was targeted because of his identity as a prominent Hindu with a successful career in the educational establishment of Chittagong city".
	There is a continuous flow of refugees who have been forced to leave their homes and property as a direct result of the discrimination and persecution to which they are subjected. There is also evidence of looting, arson and murder aimed at that minority.
	Even more disturbing is the plight of women, who are victims of sexual violence—or rape, gang rape and mass rape. We all know that sexual violence affects not only the victim but the whole family and in many cases the whole community. I shall resist the temptation to cite reports from some eminent and independent foreign journalists and the serious concerns expressed by international human rights organisations, but there are serious allegations that these crimes are the direct results of religious cleansing of the indigenous Bangladeshi Hindus and other minorities.
	The question that we must all ask is why there is a deafening silence on the subject from the authorities in Bangladesh. Why do the Bangladesh Government not institute an independent inquiry into those deaths? Why is there no evidence that perpetrators have been brought to justice? Why is the full protection of the law not afforded to the minorities in Bangladesh? Those are serious questions, to which we need answers.
	It is not only the Hindu community that is the victim—the Ahmadiyya community has suffered the same fate. The campaign of hatred has resulted in attacks on places of worship. Again, I cite the Amnesty International report on Bangladesh, which says:
	"On 31 October, Shah Alam, the Imam of the Ahmadiyya mosque, was beaten to death in front of his family. Some 90 men led by a local Islamist leader attacked him because he refused their demands to recant his Ahmadiyya faith".
	To date no one has been charged in connection with that killing.
	Although there is a constitutional guarantee for freedom of religion and expression, Ahmadiyya literature is still being banned, as my noble friend Lord Avebury said. The Christian community has not been spared, either. A church in Gopalganj was seriously damaged by a bomb blast.
	The constitution of Bangladesh enshrines secularism as one of its main pillars, and did not allow religion-based politics. However, following the death of the founding father, Sheikh Mujibar Rahman, an amendment to the constitution allowed for religion-based politics.
	Some months ago my noble friend Lord Avebury and I had the privilege to meet Sheikh Hasina. She was the Prime Minister of Bangladesh from 1996 to 2001. She is the daughter of Sheikh Mujibar Rahman, the founding father of Bangladesh. She is the current leader of the opposition in Parliament. It is a serious concern that she was a victim of a grenade attack which nearly cost her life. Many were killed on that occasion.
	There have been assassinations of Members of Parliament. First, it was Ahsanullah Master and then Mr Shah Ams Kibria. In the case of the latter it is worth quoting the editor of the Daily Star which stated:
	"The choice of Kibria as the target should not be lost on anybody. He was one of the staunchest voices of secularism and against extremism, terrorism and increasing use of religion in our politics. He was one of the early warning voices against Taliban penetration into our national politics".
	This is a serious comment against a nation moved from secularism to supporting fundamentalism. That is not to blame Islam. It is one of the great religions of the world. Fundamentalism and Islam are incompatible, as demonstrated by a large number of Muslims throughout the world. Equally, the rise in extremism often ignored or directly or indirectly supported by those in power must be a matter of serious concern to all of us.
	Bangladesh started as a liberal, peaceful, tolerant nation but is that the case now? Some of the examples may seem isolated incidents, but the total of more than 165 deaths and more than 1,700 injuries since 1999 cannot be ignored. The Awami League and its supporters have borne the brunt of such incidents. However, it is even more disturbing to find that those figures include leading intellectuals and journalists. There is evidence that over the past eight months 230 custodial deaths, apparently in cross-fire with the Rapid Action Battalion, have been recorded. Again, there are serious allegations of extra-judicial executions. Such allegations will gather momentum until such time as they are properly and independently investigated. Already the European Union heads of missions in Dhaka have issued a public statement expressing their "shock and dismay" and their deep concern that the apparent failure to investigate previous attacks had led to a climate of impunity.
	The US Department of State has drawn attention to the failure of the government to bring to justice the perpetrators of acts of violence, fostering an intimidating climate of insecurity and impunity that encourages further attacks.
	Peaceful protests are part of any democratic country but these have been met with violence and brutality. The conference I chaired last Saturday also received information on the repression of non-governmental organisations in Bangladesh. The NETZ Partnership for Development and Justice is a German NGO specialising in Bangladesh since 1979. It is supporting 10 NGOs in development work. I am informed by Ingo Ritz, the executive director, that NGOs in Bangladesh are facing serious threats. The government do not allow NGOs to work or hinder their work. Additionally, there were attacks on the offices and six co-workers were injured. A fundamentalist group is claiming responsibility for that.
	It would be easy to blame the government of Bangladesh for all this. What is required is a very clear independent investigation to get to the root of why such violence occurs. The country's non-governmental organisations are among the most active in the world and successive governments have developed effective partnerships with them to improve services to the poorest people. It is a tragedy that some of the NGOs are the targets of repression.
	The British Government should bring pressure on the Bangladesh Government to investigate and prosecute criminals responsible for violent attacks and grenade blasts on leading members of the opposition, the British High Commission, arts and cultural events, members and institutions of religious minorities and secular groups.
	In essence the world community cares about a genuine democracy in Bangladesh. That democracy can survive only if the rule of law prevails and there is a halt to the abuses of human rights quite rightly mentioned by the noble Baroness, Lady Uddin.
	We all have a responsibility to ensure that the Bangladesh Development Forum concentrates on good governance and maintenance of a stable democracy based on respect, dignity and freedom for all its citizens. The country has gone through some turbulent times. It cannot afford to sacrifice its founder's dream of a truly democratic society. We want a healthy, prosperous Bangladesh. It has to confront its own problems if it is to regain respect in world politics.

Lord Astor of Hever: My Lords, I, too, congratulate the noble Lord, Lord Avebury, on sponsoring this important debate. I totally agree with the noble Lord, Lord Dholakia, that the noble Lord, Lord Avebury, has a noble record in addressing human rights issues and that many people are alive today because of him.
	There has been much criticism of Bangladesh in this debate, and rightly so. However, I would also like to congratulate the Bangladesh cricket team on its stunning victory over Australia and hope that that is a harbinger of better things to come.
	Bangladesh is one of the world's most densely populated countries. Poverty is widespread with almost half the population living on less than a dollar a day. The noble Earl, Lord Sandwich, rightly said that the Bangladeshi people have endured much. However, the noble Baroness, Lady Uddin, pointed out that Bangladesh has managed to reduce population growth and has improved health and education. It should also be congratulated on its excellent peacekeeping duties.
	However, political tensions have spilled over into violence in recent years. The political antagonism between the Awami League, which governed until July 2001, and the Bangladesh Nationalist Party reflects personal animosity between their leaders rather than substantial ideological differences. Scores of people have been killed and hundreds injured in attacks at opposition gatherings and public venues. Senior opposition figures have also been targeted.
	Although Bangladesh signed the UN Covenant on Civil and Political Rights in September 2000, it has been criticised by organisations such as Christian Aid and Amnesty International for its poor human rights record. In a report released at the Bangladesh Development Forum on 15 May 2003, Amnesty International highlighted the fact that successive governments in Bangladesh have failed to curb serious human rights violations arising from the use of legislation and widespread practices in the law enforcement and justice system.
	These violations include torture, deaths in custody, arbitrary detention of government opponents and others, excessive use of force leading at times to extra-judicial executions, the death penalty, sporadic attacks against members of minority groups, acts of violence against women and harassment of journalists. The noble Lord, Lord Avebury, pointed out that Bangladesh is the second most dangerous country in the world in which to be a journalist.
	Amnesty International went on to highlight its concerns about two specific laws that facilitate endemic human rights violations in Bangladesh: the Special Powers Act, which allows arbitrary detention for long periods of time without charge; and Section 54 of the Code of Criminal Procedure, which facilitates torture in police or army custody.
	On coming to power the BNP-led government pledged to take a number of actions to improve human rights. Last year the Anti-corruption Commission Act was passed. As a result an independent anti-corruption commission was set up in the second half of last year after concerted donor lobbying but has yet to become fully effective. According to Amnesty International there has been little progress made on other key reforms such as the separation of the judiciary and executive in lower level courts and the formation of an independent human rights commission.
	As the noble Lord, Lord Avebury, said, the police themselves are frequently accused of a wide range of human rights violations, taking bribes, and failing to prevent other human rights abuses. They are becoming increasingly tolerant of the threatening and inciting behaviour of political and religious extremist activists. Deaths in police custody have risen significantly. Several hundred thousand people are awaiting trial, and prison conditions are poor. Will the Minister say something about the aid that we are giving for police reform and training?
	Several noble Lords mentioned the Chittagong Hill Tracts. There have been internal tensions since the 1960s between the Bengali settlers and the tribal inhabitants there. The Bangladesh Government initiated discussions with representatives of the tribal inhabitants in December 1996 which, as I understand it, resulted in a peace accord being signed in December 1997. But there has been little progress on implementing it or on settling the land disputes that are at the heart of many of the tensions between tribal inhabitants and Bengali settlers. What steps are Her Majesty's Government taking to urge the Bangladesh national Government to fully implement that peace accord?
	Bangladeshi law states that,
	"Every citizen has the right to profess, practice or propagate any religion",
	and that,
	"Every religious community or denomination has the right to establish, maintain and manage its religious institution".
	Despite that, there have been multiple attacks on religious minorities, including Hindus and the Ahmadiyya community, since the BNP Government came to power in October 2001. The noble Lord, Lord Dholakia, and the right reverend Prelate the Bishop of Coventry both mentioned attacks on the Ahmadiyya. They are a small—100,000 strong—minority Muslim movement. Since 2003, there have been anti-Ahmadiyya attacks on mosques and demands that they be declared non-Muslim. In January last year, the government of Bangladesh authorised a ban on all publications of the Ahmadiyya community. The ban, enforcement of which was subsequently suspended by the courts pending further deliberations, violates Bangladesh's obligations under the International Covenant on Civil and Political Rights to uphold human rights and freedom. Amnesty International has criticised the Bangladesh Government for banning those publications and for not taking action against the hate campaign.
	Human Rights Watch released a 45-page report earlier this month entitled Breach of Faith: Persecution of the Ahmadiyya Community in Bangladesh, in which it accuses the Bangladesh Government of failing to act against those responsible and complicity in violence against the country's Ahmadiyyas. It alleged that the two junior partners in Bangladesh's coalition government—the JI and the IOJ—have incited violence against the Ahmadiyyas. It highlights specific examples, such as the incident in Bogra in March this year, when 10,000 KN supporters armed with rods marched on an Ahmadiyya mosque; and the attack in Satkhira in April when a mob led by the KN attacked members of the community, injuring at least 25 people.
	Although the BNP claims that it is not instigating attacks on minorities, the Prime Minister and other leaders in Bangladesh have failed to demand that coalition partners desist from any role in aiding or abetting attacks and restrictions on religious minorities. That is because the ruling BNP Government hold power as part of a four-party coalition. In the most recent election, the BNP-led coalition won by a very close margin of 46 per cent to 42 per cent over the AL. The JI-IOJ alliance with the BNP determines if the BNP remains in power. Consequently, the BNP appears to be conceding to the pressure of the anti-Ahmadiyya while attempting to minimise bloodshed.
	Human Rights Watch argues that if the BNP's political strategy is to give in to some extremist demands, thereby retaining JI and IOJ support, while simultaneously working to maintain peace, the policy is not only dangerous but appears to be failing. Brad Adams, executive director of Human Rights Watch's Asia division, pointed out:
	"It's a dangerous moment in Bangladesh when the government becomes complicit in religious violence".
	Will Her Majesty's Government put pressure on the Bangladesh National Party to stop the human rights abuses that are currently taking place against the Ahmadiyya community?
	Several noble Lords have mentioned problems against the Hindus. Amnesty International has been particularly concerned about the persecution of Hindus since the general election in 2001. Hindus in Bangladesh have tended to vote for and support parties such as the Awami League. They have therefore been the target of political backlash by supporters of parties opposing the Awami League. Also, as a minority community in Bangladesh sharing a language and religion with the Indian populations of West Bengal, Hindus have been subjected to discriminatory practices or attacks by Muslim groups in Bangladesh. Since its independence, no government in Bangladesh have taken any decisive steps to protect Hindus in the face of murder, rape, kidnapping, temple destruction and physical intimidation.
	While both Hindu men and women have been subjected to attacks and intimidation, Hindu women have also been subjected to sexual violence. The Awami League points out that as a party to the International Convention on the Elimination of all forms of Discrimination against Women, the Bangladesh Government are required to take steps without delay to eliminate discrimination against women in Bangladesh.
	According to a report published by the Hindu American Foundation, which asserts that the human rights of Hindu citizens are consistently violated, over 400 documented attacks took place on Bangladeshi Hindus last year. The report urges the international community to compel the government of Bangladesh to respect the human rights of Hindus as an urgent priority. In the light of that, what steps are the Government taking to address human rights abuses against the Hindu community there?
	There have been some attempts by the Bangladesh Government to address the growing political and religious violence, for example, implementing Operation Clean Heart, the signing of the peace accord, and the establishment of the anti-corruption commission. There is a good deal of criticism about how effective those measures are. Meanwhile, the level of political and religious violence in Bangladesh is increasing, and the BNP is not taking sufficient steps to address it. Indeed, it seems to be positively turning a blind eye to the religious violence taking place against the Hindu and Ahmadiyya communities. Unfortunately, that is emboldening extremists, which is deeply worrying.
	I hope that the Bangladesh High Commission in London will listen carefully to, and act on, what has been said in this debate about the worrying events in that country, particularly as there is a great deal of goodwill to Bangladesh. She has many, many friends in this country.

Lord Triesman: My Lords, I start with a heartfelt word of apology for arriving after the beginning of the debate. I was at a G8 preparatory meeting on debt and trade and word arrived slightly too late, despite my efforts at athleticism, for me to be here right at the beginning. I particularly regret it because I would not want any sense of discourtesy to the House, and least of all to the noble Lord, Lord Avebury. Let me just say at once that I apologise for that.
	I am most grateful to the noble Lord, Lord Avebury, for giving the House the opportunity to discuss the situation in Bangladesh. His energy and commitment in defending human rights and campaigning against religious persecution are second to none, as the noble Lord, Lord Dholakia, rightly observed. I hope that the House will not feel that the issue is not also close to my heart. I am grateful to all noble Lords who have taken part in the debate.
	I shall start with the first issue of substance. It is to do with the meeting held at SOAS, which was raised by the noble Lord, Lord Avebury. The High Commissioner saw a senior official in the department shortly before the conference. We took the view that it was a private event. We will always support meetings within the law and academic life, and the FCO was interested in events. I am glad to say that the High Commissioner ensured his attendance and tried to come to grips with some of the issues rather than protesting. We were glad that the government of Bangladesh were represented in that way at that meeting.
	Let me say a few words about our relationship with Bangladesh. Britain and Bangladesh have been partners for centuries in politics, trade, and cultural and social interchange. That partnership is growing right across the board. Our trade with Bangladesh is growing. Bangladeshi exports to the United Kingdom in 2004 were up more than 10 per cent at £635 million. UK exports to Bangladesh also grew by 20 per cent. The United Kingdom remains Bangladesh's single largest investor.
	Britain is also in the forefront of Bangladesh's efforts to help to combat poverty and meet the millennium development goals. We are Bangladesh's largest bilateral development aid donor. Our development programme rose to £125 million in 2004 and a similar figure is planned for 2005. I hope that we will be counted as a friend in need: the United Kingdom contributed £29 million to relief efforts following the terrible floods in 2004. In regard to that appalling natural event, I acknowledge the sterling efforts made by my noble friend Lady Uddin, and the generosity of the British-Bangladeshi community.
	Even more importantly, the links between our people are deep, forged not least by a vibrant British-Bangladeshi community. Cultural, religious and linguistic contributions are invaluable to a multicultural society. We are friends of long standing with a broad and dynamic relationship. Of course, however, there are issues of concern that noble Lords have rightly raised.
	As noble Lords are aware, Bangladesh's early history was difficult and marked by tragedy, with a bloody liberation war, famine, assassination, coups and military rule. My noble friend Lady Uddin mentioned some of those. But the struggle for freedom and democracy achieved a hard-won multiparty system in 1991, and there have been two peaceful transfers of power since. It is a relatively short time, but there has also been tremendous economic and social progress, including food self-sufficiency, a dramatic fall in population growth, improved access to education—especially for girls—increased economic diversification, and recent economic growth at more than 5 per cent per annum.
	Bangladesh has also seen a flowering of civil society. The noble Earl, Lord Sandwich, made particular mention of the microcredit organisations, which are world leaders. I am proud that DfID has taken a role in helping to establish them. Bangladesh also has a free and vibrant press, which is to be cherished. Of course, dangers and threats to it are not acceptable. They should not be tolerated, and we will raise the issues that have been identified by the noble Lord, Lord Avebury, with the Bangladeshi authorities.
	As a whole, there have been tremendous achievements of which all Bangladeshi people can be proud, as the noble Lord, Lord Astor, said. They provide many of the prerequisites for a democratic and prosperous society, and we all want to see that in Bangladesh. Precious gains that must be safeguarded have been achieved in a difficult environment.
	Bangladesh's elected leaders have a leading role to play. The divisive relationship, to which many noble Lords have referred, between the two main political parties affects all aspects of the way in which Bangladesh is governed. The noble Lord, Lord Astor, emphasised the point a few moments ago. Politicians need to demonstrate more clearly a commitment to democratic values and institutions which rise above party-political divisions and meet the aspirations of the Bangladeshi people. Constructive dialogue between the main parties is essential for the proper running of any parliamentary democracy, and Bangladesh needs it urgently.
	I also take note of the reports from Amnesty International. They are telling. On one side, there are positive steps in anti-corruption, but on the other, some elements in the regime of law make democratic life extremely difficult. We stand ready to help in any way in which we can.
	Bangladesh will have parliamentary elections by January 2007, crucial tests of its democracy. Successful democratic elections will require a genuinely level playing field, full participation by all parties and a peaceful and efficient voting process. We urge all sides to commit themselves to that, and to make the compromises necessary to achieve it. We and others in the international community are ready to help.
	It is not always easy, and perhaps not always useful, to make a distinction between political violence and terrorism. It is sad that the history of Bangladesh contains instances of political violence, and the noble Lord, Lord Avebury, is right to highlight the instances of violence over recent years, as have other noble Lords, including the noble Lord, Lord Dholakia. As a friend of Bangladesh, we are seriously concerned by the law and order situation generally, and especially by the series of seemingly similar attacks on senior political targets.
	The 21 August 2004 grenade attack on the rally in Dhaka of the opposition Awami League was an attack on Bangladeshi democracy itself, as were the murders of the widely respected former Finance Minister, the opposition MP and their colleagues. The only possible response to such attacks is outright condemnation and a determination to bring to justice those responsible. My right honourable friend the Foreign Secretary wrote to the Bangladeshi Prime Minister after the 21 August attack calling for a transparent and credible investigation to bring the perpetrators to justice. My right honourable friend Douglas Alexander raised the lack of progress in the 21 August investigation with the Bangladeshi Prime Minister when visiting Dhaka in December 2004. He spoke also to the leader of the opposition.
	We are trying to assist the investigations, through our High Commission in Dhaka and in whatever other ways we can. Specialist officers of the Metropolitan Police also visited Sylhet shortly after the attack on the British High Commission, to assist the Bangladeshi police with their investigations. A second visit to Bangladesh was made in July. They have continued to provide assistance to the authorities there. The Bangladeshi Government have not requested assistance from us in either investigation.
	The Bangladeshi Prime Minister gave a personal undertaking to Douglas Alexander that the investigations into the attacks would be pursued to a conclusion. Although there has been some progress in other investigations—there have been arrests and other prosecutions—we regret that, to date, nobody has been arrested or prosecuted for the 21 August attack. I shall make what we are doing clear to my noble friend Lady Uddin. We will continue to make it clear to the government of Bangladesh how essential it is to demonstrate to the Bangladeshi people and to the international community that they are doing everything in their powers to bring to justice all those behind the attacks, whoever they may be. To avoid a climate of impunity, justice needs to be done and seen to be done.
	Extremism was described in the debate as a cancer, and I agree. Bangladesh is not immune from terrorism. No country is. However, it is also right to acknowledge the contribution that the country has made to UN peacekeeping. Bangladeshi troops wearing blue berets stand in the way of extremism in many difficult parts of the world. However, like other countries, Bangladesh must face the dangers posed to it by domestic and international terrorism, and take decisive action to tackle them. The noble Lord, Lord Avebury, is right to suggest that there has been some worrying extremist activity recently, of which the examples in journalism are among some of the most significant.
	We welcome recent acknowledgements by the Bangladeshi Prime Minister and other senior Ministers about the dangers posed by terrorism. We also welcome some positive steps such as the banning of two extremist groups in February 2005 and the Bangladeshi Government's commitment to sign all UN counter-terrorism conventions. We look forward to the required legislation being passed soon by the Bangladeshi parliament. The UK and other international partners are already working with the Bangladeshi authorities to try to improve their counter-terrorism capacity. We will assist further.
	At the base of all of this is the need for respect of human rights. Whatever the motivations of those who carry out criminal acts, it is incumbent upon any government to apply the law. There are worrying indications that the Rapid Action Battalion and the police in Bangladesh are not always doing so. The noble Lord, Lord Dholakia, emphasised our anxieties and I agree with him that the RAB causes anxiety. There is a need for a clear investigation and prosecutions as necessary. We look to the Bangladeshi Government to see that their security agencies are fully accountable.
	The attack in Sylhet in May 2004, in which our High Commissioner to Bangladesh, Mr Anwar Choudhury, was injured and three people were killed, was a shocking event. I believe that noble Lords will want to join me in acknowledging Mr Choudhury's courage in returning to his post so rapidly and, more widely, to recognise the courage and dedication of many of our diplomats working in dangerous environments around the world.
	Specialists from the Metropolitan Police were deployed to Bangladesh immediately after the attack. We are disappointed that the investigation has not yet led to the arrest and prosecution of those responsible. It will remain at the very top of our agenda in all our high-level contacts with the Bangladeshi Government. The investigation must be pursued to a conclusion and those who died deserve no less. The noble Earl, Lord Sandwich, reminded us that paramedics and people working with the NGOs also lose their lives. Those investigations are equally important to us and must be pursued.
	I want to turn to religious intolerance and violence. Bangladeshi society has a history of moderation and tolerance. The vast majority of Bangladeshis are strongly opposed to religious extremism. Sadly, there is evidence of intolerance. As the noble Lord, Lord Avebury, and the right reverend Prelate the Bishop of Coventry have rightly pointed out, sadly, there is considerable evidence of intolerance against minorities. The situation of the Ahmadiyya community is a pertinent example. There can be no excuse for the organised intimidation against that peaceful community which has taken place over the past two years. Drawing on a phrase used by the right reverend Prelate, there is no such thing as the obscure persecution of an obscure group. It touches us all and it is fundamental to civilised life.
	I feel that strongly. My mother's family were encouraged to leave Spain in 1492 in circumstances which meant that those who survived were then encouraged to leave almost every other European country. Such intolerance against religious groups frequently leads to the most excessive violence and murder that is experienced in the world. We all have the deepest commitment to ensuring that it is stopped.
	I assure the right reverend Prelate that we regularly seek to highlight this issue and to support the rights of Ahmadis and other minorities and have lobbied extensively in that regard. The British High Commission in Dhaka maintains close contacts with the Ahmadiyya community. The European Community will be closely involved. The local EU presidency raised the situation with the home Minister in May. The European heads of mission demonstrated their solidarity in late 2004 by visiting an Ahmadiyya mosque under threat from the extremists. Such support will continue to be visible.
	On occasions, the Bangladeshi police have prevented violence but the authorities have too often shown too little determination to stand up to the extremists. The moves to ban Ahmadiyya publications was a particularly regrettable example. We will continue to encourage the Bangladeshi authorities to take a proactive and unequivocal approach to meeting their constitutional and international human rights obligations to all minorities. I will certainly look at the suggestion made by my noble friend Lady Uddin for parliamentary contact and visits. Transparency in governance and debt relief all hang together.
	Several other questions were raised and I touch on them briefly. The situation in the Rohinga refugee camps is being raised by the British High Commission. We have taken a close interest, with the support of the UNHCR. Officials have visited the camps on several occasions and it is my understanding, which I will confirm, that they will continue to do so. It is a difficult situation to resolve, but we are encouraging the government of Bangladesh to be flexible in their resolve and to deal with the situation with the appropriate levels of attention.
	I was also asked by the noble Earl, Lord Sandwich, to comment on the Government's assistance to the Biharis. We are well aware of their problems and we recognise the historical context. However, essentially this is an issue for the governments of Bangladesh and Pakistan. We are encouraging them to come to a long-term resolution, because that is obviously what is now needed. I am pleased to confirm the noble Earl's understanding that the British High Commission is implementing a project and I will write to the noble Earl with further details on how it is progressing.
	I was asked by the noble Lord, Lord Astor of Hever, to comment on the rights of the Chittagong Hill Tracts. We again look to the Bangladeshi Government to implement in full the 1997 peace agreement in full consultation with local communities. We welcome that peace accord, which ended large-scale violence in those hill tracts. We are disappointed that there has not been the progress and implementation we would have all wished. We raised the issue and we will continue to do so. We are encouraging the government to implement the agreement fully. We will stay in close contact with the representatives of the Chittagong Hill Tracts and we will support the work of the United Nations Development Programme.
	The theme that has run through this important debate is that a threat is consistently posed to the rule of law in Bangladesh. So much of it comes down to the stability of the rule of law, which is an essential underpinning of any democratic society. The UK is working actively in Bangladesh to strengthen the rule of law in practical ways. It is working with the government and with civil society. I can tell the noble Lord, Lord Astor, that the Department for International Development is providing £5 million over the next three years to a major UNDP-managed police reform project, for which he rightly called, in conjunction with the government of Bangladesh. We are also supporting local NGOs engaged in developing alternative dispute resolution. This innovative approach is beginning to produce results.
	Security concerns have damaged Bangladesh's reputation. All nations rely on having a good reputation. It is all the more reason why we need to deepen our engagement with that country and to continue our work to support Bangladesh's continued economic and democratic development. We most certainly will do so.

Lord Avebury: My Lords, I am extremely grateful to all noble Lords who have taken part. Perhaps I may express special thanks to the noble Baroness, Lady Uddin. She has conveyed to the House her enormous experience and breadth of knowledge of Bangladesh issues and has given valuable advice on how we should deal with these problems. I like her suggestion that a parliamentary delegation should visit Bangladesh and freely and openly discuss some of the issues with which we have dealt today.
	I agree that it cannot be right to sweep these matters under the carpet. Whatever the response may be, issues need to be discussed. She rightly pointed to many aspects of the enormous progress that has been made, such as the economic growth of Bangladesh. The contribution it has made to the peacekeeping efforts of the United Nations was mentioned by other noble Lords. All that could be swept away if they do not get to grip with the worsening law and order situation.
	As your Lordships have acknowledged, if particular efforts are not made in the lead up to the elections next year to ensure that there is a proper contest, the Ahmadis may feel, in the climate of violence and repression against their members, that they have to boycott the event. Even higher-level efforts than a parliamentary delegation may be required, although that would be useful.
	To persuade the opposition that it is safe for it to take part in the election, and that there will not be violence and intimidation of those who seek to contest it, I suggest to the Minister that all hands must be brought to the pump. That will require not just individual, bilateral efforts between the United Kingdom and Bangladesh, valuable though they are, but also the efforts of the European Union, maybe through SARC, and through the United Nations. Every effort must be made to ensure that those elections take place fairly and that there is a level playing field for the parties.
	I was also extremely grateful to the right reverend Prelate for highlighting the situation in the Ahmadiyya community. Although it is not the only religious minority under threat, it has suffered disproportionately. When the High Commissioner spoke at the conference on Friday, it was significant that he attempted to dismiss their concerns as being those of a very small minority of only 100,000 people and as not important in relation to the size of the majority Suni community. Of course, as the right reverend Prelate says, it does not matter how small they are, their rights are exactly the same as everyone else's. I hope that we continue to impress that view on the Bangladeshi Government.
	I am concerned about one point that was not mentioned in the debate: we have never received any response to those representations. I know, from the correspondence that I have with Ministers at the Foreign Office, that they continually raise these matters, for which I am very grateful to them. We do not receive any feedback from the Bangladeshi authorities, nor do we hear them standing up and condemning what is happening. I am open to correction if I am wrong in that, but I believe it is true to say that we have never heard Prime Minister Khaleda Zia speaking against the persecution of the Ahmadis, against the attitude of the police towards the violation and desecration of mosques and against the attacks on individual members of the Ahmadi community. Of course, we know that it is part and parcel of their viewpoint that the Ahmadis are, in some respects, a substandard people because they wish to ban their publications. That attitude infects the behaviour of the security authorities towards religious minorities.
	I do not wish to go through every aspect of the problem again in my concluding remarks. I believe that this is an ongoing subject for debate, which we have not exhausted this afternoon. At Friday's conference, it was decided that we would form an international network of organisations concerned with the promotion of democracy and the rule of law in Bangladesh. We hope to join up with similar organisations in Germany, the Netherlands and elsewhere.
	This debate is part of an ongoing discussion which I imagine will be continued up until polling day in 2006 and in which the people of this country can join, together with those who are fighting for freedom and democracy in Bangladesh. We shall ensure, come what may, that the freedoms and rights of the minorities, whether political, ethnic or religious, are fully taken care of by the concerted efforts of people in Bangladesh and throughout the world. I beg leave to withdraw the Motion of Papers.

Motion for Papers, by leave, withdrawn.

Renewable Energy (S&T Report)

Lord Oxburgh: rose to move, That this House takes note of the report of the Science and Technology Committee on Renewable Energy: Practicalities (4th Report, Session 2003–04, HL Paper 126).

Lord Oxburgh: My Lords, I begin by thanking the right reverend Prelate the Bishop of Liverpool. He was successful in the ballot for a debate but, as it turned out, our debate on a related topic had been arranged for the same afternoon. He kindly agreed that the two Motions should be debated together.
	We have waited a long time for this debate and we have the unusual but, in this case, welcome innovation of two government replies to our report: one after six months, which was, in the committee's eyes, seriously incomplete, and a more considered reply six months later. We are grateful for that, but I saw it for the first time only on Monday and the committee has not yet considered it.
	Today's debate will be broad, not only because of the parallel Motions, but also because so much has happened in the past 12 months. There is now wide acceptance of the reality of anthropogenic climate change and the need to take action urgently. We have had a period of sustained high oil and gas prices which, short of a major world recession, seem unlikely to fall a long way any time soon, substantially improving the economics of renewable energy. We have seen the introduction of the European Emissions Trading Scheme and we have a new Government. We are delighted that the need for a Minister who can devote his whole attention to energy is accepted.
	This is not a debate on climate change. However, some noble Lords may feel that the unwillingness of the Government of the United States to accept the judgment of its own prestigious National Academy of Sciences—not to mention those of every other national scientific academy in the world, including our own Royal Society—means that this is not an urgent matter. I shall, therefore, comment very briefly.
	I am not a climate scientist but I have worked for many years in closely related areas. I can say only that the prediction of the Nobel Prize-winning chemist Arrhenius in 1903, that the burning of fossil fuels would increase the carbon dioxide content of the atmosphere and cause the Earth to warm, looks incontestable. There is uncertainty about how fast the temperature will rise and about details of climate change, but the overwhelming probability is that the Earth will become a less hospitable place for its current inhabitants. It is the speed of the change that will make it hard for us and many other species to adapt.
	Among human populations, those living in the poorest countries will be at the greatest risk. In that way, the Government's agenda for Africa and for climate change are closely linked. I am happy to congratulate the Government on the firm stance they have taken on climate change and the priority they have accorded it for their presidency of the G8 and the European Union.
	Our report addressed one element of the Government's energy policy as outlined in the 2003 White Paper; namely, the intention that by 2010, 10 per cent and by 2020, 20 per cent of our electricity should be generated from renewable sources—that is from wind, waves, sun and the other intrinsic Earth processes, or from plant life or organic wastes. I wish to record my thanks to our committee who devoted so much time to this inquiry.
	That said, we remain puzzled by the introduction to the White Paper in which the Government list their desiderata: security of energy supply, reduced greenhouse emissions, competitive energy markets and elimination of fuel poverty. But they are unwilling to prioritise them. They include the important social objective of reducing fuel poverty. Surely this can be met more readily in other and, dare I say, more rational ways. The White Paper also involves a curiously eclectic application of market forces.
	The Government have initiated a review of the Climate Change Programme and of the renewables obligation certificate, the so-called "ROCs scheme". In our report, we were critical of that scheme, but let me say that, whatever its deficiencies, it is much better than nothing. It has achieved results.
	We were concerned about it for two main reasons: first, it was intrinsically incapable of achieving more than 60 to 70 per cent of the Government's target. Secondly, although nominally technology-blind, it could be attractive only to those deploying the imported technology of wind turbines because our indigenous research base in other relevant technologies was at such a low level. That remained true even after the ROCs scheme was extended to 2015. But, although the scheme is less than perfect, investor confidence must be maintained by not changing conditions that affect those who have already invested.
	Another problem is that soon the commercially attractive renewable energy schemes will have been completed. On the other hand, as time goes on, the returns of the ROCs scheme will decline and the incentives for the new, more costly schemes will progressively diminish. Offshore wind installations cost about twice as much as those onshore, which is rather more than originally thought. At this point, I have to declare an interest as chairman of the Shell Transport and Trading Company; the Shell Group is involved in many wind projects.
	At this point, it is possible to offer a suggestion. It originates neither from Shell nor the committee. Rather than extend the ROCs scheme as it exists today until 2020, as has been suggested, it could be slightly modified for future investors while keeping conditions unchanged for existing ones. The current renewables obligations that have been placed upon suppliers of electricity for 2010 and 2015 would remain unchanged and an additional obligation for 2020 would be added. However, only renewable energy produced from generation plant commissioned after, say, 2008—to give 12 years of renewables obligations—would be eligible for future buy-out fund payments. Renewable obligations certificates would carry a date stamp that would qualify them to receive payments from the respective buy-out funds for the applicable period. Suppliers of electricity to consumers would still have their targets to meet until 2020, and would have to buy-out their obligations if they did not, but after 2015, they would receive buy-out fund payments only for newer projects that have generated ROCs eligible for that period.
	This would limit the cost of electricity, direct future payments to where they would do most good, not affect the conditions under which existing investors invested, and so on. It would also allow the Government to continue to extend the renewables target to deal with the longer-term carbon reduction plans without disrupting investor confidence by changing the system.
	A different difficulty arises from the structure of the electricity industry. Annual payments from the ROCs buy-out fund go to electricity distribution companies that buy electricity from generating companies at fixed prices under long-term power purchase agreements. Therefore the high incentives provided by the ROCs scheme when the Government's targets are not reached, do not readily feed through to those who can build new plant—at any rate not readily, transparently or sufficiently promptly to affect their market behaviour. This problem too would be slightly mitigated by the proposal I made earlier.
	Pressure of other commitments has prevented me examining in detail the Government's more considered reply. I am glad to see that in a number of cases the Government accept our recommendations. On the matter of whether the renewables target for 2010 will be met, frankly, it is now neither here nor there. The die is cast and, in any case, I believe that there is now a widely held view that national energy policy has to be revisited.
	I looked at the later paragraphs in the reply concerning security of supply, and I am frankly dismayed by the blind faith in markets. It could be described in chemical terms as a failure to distinguish between thermodynamics and kinetics; that is, between what should happen and what will happen. It is probably true that markets will ultimately correct any imbalance between supply and demand. But the reply fails to recognise that there invariably is a time delay. If the market is for baked beans, that may not matter too much, but for an essential infrastructural service, it does matter; the lights must not go out. I expect that the committee will wish to pursue this matter further.
	I now turn to the use of biomass as a renewable resource, partly because in this area we found multiple regulatory bodies whose terms of reference and priorities were imperfectly aligned. Furthermore, they were not aligned to support broader government energy policy. This led to operational nightmares for the firms concerned. We look forward to the report of Sir Ben Gill's working party, which has been set up to look into these problems.
	Biomass—plant matter—may either be directly burned in power stations or be used to make liquid fuels. Because plants extract carbon from the air, when they are burned it is returned to the air and the energy derived from them should be carbon neutral. However, care is needed because energy is required to cultivate, fertilise and transport biomass, and one can end up using almost as much energy to produce the fuel as one gets out of it.
	For some time, biodiesel has been made from vegetable oils—linseed, rape and so on—while the petrol substitute, ethanol, can be produced by the fermentation of plant sugars from sugar cane, sugar beet or corn heads. In the past, these products have been more expensive than their fossil fuel equivalents, but recent rises in oil prices have reduced the difference and I believe that last month corn ethanol in the US was briefly cheaper than gasoline.
	The cost of these fuels is high not only because of the labour and energy needed to produce them, but also because only a small fraction of the plant is used for fuel and the rest is wasted. However, a small Canadian enzyme company, Iogen, has shown that this does not have to be so. It has developed an enzyme that will break down straw into its constituent sugars and it is now, in collaboration with Shell, making an ethanol fuel from what was previously a waste product. Industrially this process has much more in common with whisky making than oil refining: it is fermentation followed by distillation. In full production, it will be significantly cheaper than today's oil. Producing liquid fuel from waste is a great step forward. The processing itself has low additional energy requirements and waste straw is already collected and moved. That means that the fuel is effectively emissions-neutral. It is known as Ecoethanol to distinguish it from corn ethanol that carries around 75 per cent of the emissions from the gasoline that it can be used to replace.
	The message again is clear: we must look carefully at the emissions capability associated with any particular renewable source. But this technology opens the door to the production of fuel from plant-derived wastes and from the organic elements of urban waste of all kinds. But perhaps more importantly, it opens the door to the co-production of food and fuel, avoiding very uncomfortable competition between the two. Ultimately, this approach may offer the possibility of sustainable transport.
	If human life is to continue on this planet, we have to find renewable, secure and sustainable energy sources. Stocks of fossil fuel are, by their nature, finite, although we have no alternative to continuing to use them for some time. But we must recognise that this is a stopgap measure. There are promising advances, but the contribution from many renewables is limited simply because our technology is at the present time too primitive to exploit them fully. I beg to move.
	Moved, That this House takes note of the report of the Science and Technology Committee on Renewable Energy: Practicalities (4th Report, Session 2003–04, HL Paper 126).—(Lord Oxburgh.)

The Lord Bishop of Liverpool: My Lords, to find that my Motion was drawn in the ballot for the same day as the report of the noble Lord, Lord Oxburgh, on renewable energy was due to be debated, seemed to me to be a happy accident, even providential; to discover that the movers of the Motions should be both Lords of Liverpool, the one temporal and the other spiritual, feels almost like an act of God.
	The matters before us are very serious. I begin with a stark warning from the Intergovernmental Panel on Climate Change that the poorest countries in the world will be the first and most to suffer. Africa, Asia and Latin America are all at risk from sea-level rise and flooding. Already environmental refugees are numbered in their millions. The International Federation of Red Cross and Red Crescent societies has evidence that 13 times more people die per environmental disaster in low human development countries than in countries of high human development. On visits with the relief agency Tear Fund to India, Africa and central America I have seen first hand the devastating consequences of environmental disasters—irregular seasons leading to total crop failure, poverty and malnutrition; hurricanes that have devastated villages; and flooding that has swept children away to drown.
	To quote an Indian commentator:
	"In the recent past human actions were trivial when set against the dominant processes of nature".
	That is no longer so. The human species now influences the fundamental processes of this planet. Ozone depletion, world-wide pollution and climate change are testimonies to our power. That view is reinforced by the academies of science of the G8 countries, who call on the leaders of the forthcoming summit to acknowledge that the threat of climate change is clear and increasing, and to identify action that can be taken now to reduce greenhouse gas emissions.
	In a poem by Gerald Manly Hopkins called "God's Grandeur", there is the optimistic line:
	"And for all this, nature is never spent".
	I wonder whether he would have written so hopefully of today's world where our Prime Minister has gone on record saying that unchecked climate change could have the potential to be catastrophic in both human and economic terms.
	I labour the point deliberately in case anyone should think that the Motions before us are just the hobbyhorses of eco-enthusiasts. The planet is facing a crisis of global proportions. Unfortunately, the people with the power to act are the most protected from feeling its impact; and those who do feel the devastating winds of climate change are the poor and are powerless to do anything about it.
	In a recent lecture to the RSA, Sir John Houghton made the plea that:
	"Global pollution requires a global solution".
	That is why the forthcoming G8 Summit is so vital to the future of the earth. If the leaders are anxious to go down in history as those who made a difference to the future well-being of the planet, it needs to be said that unless they take action on climate change there may well not be a future history in which to record their meeting.
	The Prime Minister rightly wants to place at the top of the G8 agenda both Africa and climate change. Dealing with poverty in Africa calls for debt cancellation, good governance and fair trade—but it also calls for action on climate change, which will increase Africa's poverty through droughts and floods. That is already happening. What is the point at Gleneagles of taking steps to reduce poverty with one hand but, by refusing action on climate change, to increase poverty with the other hand? Both problems need to be tackled. The Prime Minister's dual emphasis on Africa and climate change is to be warmly welcomed.
	On a recent visit to America, which concluded with me leading a seminar at the World Bank on faith and sustainable development, I learned how much Americans value the leadership of the Prime Minister. I heard it said at a senior level in Washington that the President was not unsympathetic to the call to act on climate change, but that it was the Senate which needed to be persuaded.
	It is therefore a relief to note that this week the Senate has begun at last to consider a programme to regulate and control CO2 emissions. Let us hope that this shift in the Senate translates into a more robust statement in the communiqué from the G8 summit.
	As the report of the noble Lord, Lord Oxburgh, shows, investment in research and development of renewables in America in 2004–05 was $250 million, which actually compares favourably with the UK Government's investment of only £12.2 million in 2002–03. The Science and Technology Committee derided that sum as deplorable.
	Many of us who welcome and support the Prime Minister's leadership in placing climate change at the top of the G8 agenda want him to strengthen his own position, which we feel is undermined by the Government's own record. The Prime Minister rightly says that time is running out. Leadership is exercised by both rhetoric and example. The former without the latter robs you of authority.
	The government of China, whose economy is expanding at a remarkable rate, is allegedly embarking on a programme of building 600 coal-fired power stations. The imagination goes into meltdown at the effect that that will have on the climate and the environment. But any pleas from the G8 leaders that they, the Chinese, should invest in alternative sources of energy or develop and apply clean-coal technology, or that they should reduce energy consumption, would have the Chinese scrutinising our recent history and our current strategy and timetable for the same things. To adapt a famous saying, we should be careful about removing the dust from our neighbour's eyes when having a lump of coal in our own.
	It is the considered view of many who are extremely sympathetic to the Government's aims that, when it comes to energy efficiency, reduction and conservation and to the implementation of a programme of renewable sources of energy, the Government's policy at home is ad hoc and lacks the investment, the strategy and the timetable necessary given the urgency of the situation—a matter to which the noble Lord, Lord Oxburgh, referred.
	Our energy consumption falls into three categories—buildings, transport and industry. According to Sir John Houghton,
	"large savings can be made in all three sectors, many with significant savings in cost".
	But it is simply not happening on the scale needed. Over the next 20 years, for example, 4 million homes will be built. But where is the policy to ensure zero energy development? And what is the co-ordinated strategy to reduce the amount of energy consumed through transportation? One of the conclusions of the report of the noble Lord, Lord Oxburgh, is:
	"The Government are not taking these problems sufficiently seriously".
	I know only too well that it is very easy for people like me to stand up and make demands on the Government. I would like to reassure the noble Lord the Minister that I sometimes put myself, believe it or not, in their shoes and imagine how the executive must cope with all the competing demands. I know that the Government cannot do everything. I know that they have to establish priorities. But this is precisely the point. Both the Chancellor and the Prime Minister have already established climate change as their priority. Having established climate change and, therefore, by implication, energy reduction and renewables, it is right for us to ask whether or not they have in place a strategy and a timetable to deliver on their acknowledged priority.
	In another place on 14 June the Minister for Energy announced the figure for investing in carbon abatement technologies. He acknowledged the major expansion of coal-fired power generation expected in China and India, saying that he wanted,
	"to put the UK at the forefront of what could be valuable export opportunities".—[Official Report, Commons, 14/06/05; col. WS55.]
	The figure announced was £25 million—approximately the cost of one city academy. I do not mock; I happen to chair the governing body of an academy that will open this September. But does that sum of money really reflect the Government's priority on climate change?
	On 13 June, the Minister announced that the Government are spending more than £500 million between 2002 and 2008 on emerging renewable and low-carbon technologies. That figure over six years is about £80 million a year. But given all that the Prime Minister and the Chancellor have said about the urgency of climate change, does £80 million a year seem adequate to the threat; does it seem commensurate with the millions of environmental refugees; does it seem a proper expression of the word "priority"?
	In a comprehensive and visionary speech last year on climate change, the Prime Minister set out what needs to be done nationally and internationally. Referring to the target of 60 per cent reduction of CO2 emissions by 2050, he said:
	"This implies a massive change in the way this country produces and uses energy. We are committed to this change".
	He added:
	"We need . . . to invest on a large scale".
	The question is: do the Government's policy and sums of £80 million a year for six years express this "massive change" and investment on a "large scale"?
	I know from other statements that the Government hope for and fully expect investment from the commercial sector—rightly so—but the market has a poor record in anticipating trends in the long term. It responds overwhelmingly to price and to the short term. Although the market has been effective in bringing reduced energy prices during the past two decades, in its raw form it takes no account of environmental or other external factors. That is why leadership and intervention are required from the Government to stimulate and regulate the market for the sake of our futures and the common good.
	Environmental factors must be integrated into the Government's energy and economic policies. The point was powerfully made by the Chancellor of the Exchequer in an address to the Energy and Environment Ministerial Roundtable three months ago. He said:
	"Environmental issues—including climate change—have traditionally been placed in a category separate from the economy and from economic policy. But this is no longer tenable. Across a range of environmental issues—from soil erosion to the depletion of marine stocks, from water scarcity to air pollution—it is clear now not just that economic activity is their cause, but that these problems in themselves threaten future economic activity and growth".
	That is the clearest statement from the Government that we cannot expect the market to be the protector of our environment. Environmental factors must be integrated into the Government's economic policy. The wellbeing of the planet and the needs of the poor require all the G8 countries, who produce 50 per cent of the world's CO2 emissions, and our Government in particular, to have a strategy and timetable for energy reduction and renewable resources on the scale that is so evidently and urgently necessary.
	There is an African proverb which eloquently and succinctly points up our responsibility to future generations:
	"We have borrowed the present from our children".
	I support the Motion.

Lord Whitty: My Lords, first, I thank the noble Lord, Lord Oxburgh, and his committee for such an expert and detailed report, which he outlined today. That is very helpful. My thanks go, too, to the right reverend Prelate, who has not only anticipated my lines on the importance of climate change but done so far more eloquently than I could have. That is the backdrop against which we are discussing the issue of renewable energy and energy efficiency. Although the noble Lord, Lord Oxburgh, is right to say that this is not primarily a debate about climate change, climate change is what drives much of our consideration today.
	Much technical expertise was represented on the noble Lord's committee, many members of which are speaking today, along with many others with detailed knowledge of this area. My only claim to fame is that for the past three years part of my title in Defra was Minister for sustainable energy. Broadly, that meant that I looked after the environmental and social dimensions of energy policy. I must say, it was one of the more frustrating aspects of my job. Given that I was also Minister for agriculture, in proportionate terms, that is saying quite something. I therefore thought that I would take the opportunity of this debate at least to share some of my frustration.
	The key to that frustration is that this is such an important issue. There are not only the catastrophic consequences of failing to tackle it, which the right reverend Prelate has already pointed out, but the difficulty of doing so, because we are engaged in a process of changing the behaviour of millions of individuals, of hundreds of thousands of institutions and companies and, indeed, of government departments. So I shall talk about a few of the specific aspects of renewables and mainly about energy efficiency, but also about the machinery of government.
	My frustration is not because I disagree with the broad thrust of government policy. I strongly support it—indeed I was party to it. My frustration—this was reflected by the right reverend Prelate—is at the lack of urgency, priority, resourcing, redirection of other governmental bodies in terms of regulation and of co-ordination of government in this field.
	There are some serious issues here that the Government will have to grasp if they are to live up to the objectives set out by the Prime Minister in the speeches already referred to. We ought to be absolutely clear that the prime objective of energy policy must now be a reduction in the carbon content of our energy sourcing and use. There are of course other objectives of energy policy, which are set out in the White Paper on energy, but the prime objective of energy policy over the past 20 years of minimum price achieved through maximum competition is no longer valid. That was the policy objective for several decades, and as a society we have benefited from it in many ways, but there is now a more important objective: the environmental climate change objective.
	Although there are always trade-offs, that priority must be reflected over other objectives. These include consumer preference in relation to planning considerations; waste management, whether in relation to biomass or nuclear power; and—even I, who was its champion, am prepared to admit—the fuel poverty programme, despite the consequences of higher energy prices to drive the achievements in energy efficiency that are now needed. We will need other measures to offset some of those effects in the social and environmental field, but we ought to be clear, as the right reverend Prelate has just been, that the overriding objective of energy policy, in sourcing and use, must be to minimise the carbon content thereof and that of other greenhouse gases.
	Some serious ideological problems are involved here. Reference has been made to the American position. The Americans also have heavy investment in the technology that is required. The world will need that American investment and commitment to technology, but we cannot afford the American ideology that says that technology will provide the solution—that we do not need other market interventions, either nationally or internationally because, ultimately, technology will provide. Technology is a vital part of the solution, but it emerges only in a framework set by governments nationally and internationally and by society as a whole.
	We recognise that. Although there has been liberalisation and privatisation of the industry, we have already recognised that this is not a normal market. We have had heavy regulation. The whole paraphernalia of ROCs, tax interventions, the energy efficiency commitment and the role of Ofgem indicates that it is not a normal market. It is one in which government must intervene, and we cannot afford the ideology that says that the market will, in the end, provide without very heavy intervention by government regulators and others.
	There is also a bit of an ideological problem, particularly in this House, about the role of nuclear energy. I do not believe that we should have the argument in terms of "nuclear energy versus renewables". It is a question of nuclear energy and renewables replacing carbon-based fuels. With nuclear power, the timescale, the cost, the management of by-products and public acceptability must be addressed. It ought not to be seen as a question of wind power against nuclear power. That is a false dichotomy.
	Among the areas in which I found some frustration in developing renewables was the biomass area. Reference has already been made to the committee that I helped set up under Ben Gill—I hope that it will report later this year—to consider how we might overcome some of the regulatory and financial difficulties in getting the biomass market off the ground.
	With regard to liquid biomass and biofuels, we already have a solution. We provided it in this House through amendments to the Energy Bill. I do not understand why the Government have not adopted the renewable fuels obligation with regard to transport. After all, transport is our most rapidly growing source of carbon-based emissions, and that issue must be tackled directly. We have already put the ability to do so on the statute book.
	There are other frustrations. One is the change in behaviour that we need and the timidity with which government, industry and those who advise them accept interventions to try to change behaviour. Behaviour will not change of itself; we all know that. We know that, despite the increasing price of energy, energy is a pretty low priority for almost every company—big or small—in the land. We also know that we leave the television and the computer on stand-by. Unless there are interventions to ensure that we change our behaviour—they can come only from the state—we will not achieve change. We need fiscal intervention, regulatory intervention, standard setting and some restructuring of the taxation of consumer products.
	My experience in government suggests that Her Majesty's Treasury and the regulatory authorities, particularly Ofgem, find it difficult to intervene in a way that is designed to change behaviour. If we do not change behaviour, all the interventions in the world and all the debates, declarations and exhortations from the Prime Minister downwards will not achieve the kind of improvement in energy efficiency that we need.
	My final point is that I believe that we have not yet got complete cohesion in government on the matter. I welcome the appointment of Malcolm Wicks. He may be in the wrong department, but we shall settle for that at the moment. I do not normally argue for changes in government structure to achieve a change in government policy, but, in this context, I think that, despite the relatively good co-operation involving Ministers in the energy field, we need a more focused structure, to take in not only the environmental dimension of energy policy but a broader role for Ofgem and new responsibilities for buildings, which produce 50 per cent of our carbon, and for transport. We need a more focused structure for dealing with energy, which is probably the most important aspect of our attempts to tackle climate change.

The Earl of Selborne: My Lords, it is a great privilege to follow the noble Lord, Lord Whitty. I derived some comfort from hearing about his frustrations at the centre of government in dealing with renewable energy policy because I wanted to refer to more or less the same issue, albeit from the grass roots—perhaps I should say, "the wood chip"—and talk about how, at a farm level, one tries to implement a renewable energy policy, when one sometimes faces conflicting pressures, some—not all—of which come from government.
	First, I pay tribute to the noble Lord, Lord Oxburgh, and to the right reverend Prelate for giving us the opportunity to speak in this debate. I pay particular tribute to the Select Committee for a report that I read with particular pleasure. It brought together for the first time—in my mind, anyway—some of the practicalities relating to renewable energy and the reasons why we appear to be drifting towards targets that we will not achieve.
	The trouble with renewable energy is that it is diffuse. It comes from different directions and does not fit in to the large generation schemes that we are used to. For those who are centrally planning, it must be a nightmare; they cannot predict when it will appear, and they cannot price it sensibly. There is a failure to reconcile the renewable energy sector with the existing infrastructure. If you are going to set targets for renewable energy, you have to look first at the requirements of the renewable energy sector and try to fit in appropriate arrangements. I do not think that anyone has seriously done that.
	As the committee points out in the report, the pricing arrangements under the new electricity trading arrangements are simply inappropriate. The balancing charges penalise the small generators, and much—not all—of the renewable generation of electricity will be small.
	There are, however, any number of participants in government and in trusts who will encourage feasibility studies, particularly for biomass. You would have thought that, with all that goodwill washing around, it would be fairly easy to set up some sort of commercial operation. However, as the report shows at, I think, box 10—I was privileged to be allowed to give evidence to the committee—I pointed out some of the difficulties that I had had trying to implement a small biomass scheme at farm level.
	Reading the report, I was particularly pleased that the Select Committee had visited Woking Borough Council. It was clear to me that, if we are drifting and losing the plot at the national level, that borough—at local level—has followed through on consistent, coherent policies, whatever administration may be in power, taking the low fruit first and moving on to more ambitious schemes and meeting some impressive targets. We are told in Appendix 7—pages 103 and 104—that the CO2 emissions of Woking Borough Council have been reduced by 15 per cent since 1990; that 84 per cent of electrical and thermal energy supplied to council properties is generated from sustainable sources; and that 3.9 per cent of the electrical energy generated is from renewable sources.
	That policy started with energy saving and using the money saved to fund further investment in different renewable projects, including combined heat and power plants right in the middle of Woking. Some of your Lordships may have seen them. Many people think that they are nothing less than incinerators and that they should be treated with great caution. They do not realise that they have just parked their car next to one and that there are no noxious toxins coming out of the top. People learn that those are something that they can buy into and they are proud to be part of a successful borough council. They also attract inward investment, an associated matter.
	In order to get around the iniquitous new electricity tariff arrangements, Woking Borough Council has gone to considerable cost—again with funds generated from its own projects over the years—to put in a private wire network. It is now selling electricity to houses and properties at something less than the full retail price, as opposed to the wholesale price, which is very different.
	I should have liked to start by declaring an interest and saying that, in my modest way, I was doing a small Woking Borough Council exercise on my farm. I have a large packhouse with 2,000 tonnes of refrigerated storage of fruit, with greater capacity, which is a large user of electricity. We have 300 or 400 acres of weald and woodland which used to be coppiced for charcoal and for the coppice products that are now no longer commercially in demand. Nevertheless, wildlife requires or would appreciate the coppicing being restored. Again, there are a number of relatively modest schemes that Defra and the Forestry Authority have promoted to try to encourage people to coppice.
	If you are lucky enough to have a contract with a renewable energy supplier, Defra will give you money to plant acres and acres of willow or miscanthus, but that is not at all what wildlife interests would wish—that is monoculture. Miscanthus has no value at all that I can think of. But if you were to restore some of the traditional woodlands—incidentally, south-east England is the most wooded region of England—you would have had a double whammy and succeeded on two fronts. It seems logical that we should have policies that combine nature conservation as well as renewable energy programmes. As I say, however, that proved very difficult and we were prevented by the punitive pricing for those who have to sell at the prices required under the NETA.
	However, there is no need for new research—the technology exists. Wood-chip operations exist at the farm scale in Denmark and Holland where you can buy a plant and install it. You can make wood chips from any number of products. We need—I hope that Mr Ben Gill's report addresses it—a much more friendly regulatory approach. We also need an approach where we think small. It is very sensible to think small in renewable energy. It could even be the householder with his own wood-burning plant or solar panel with appropriate metering. They should be allowed to net off the cost of supplying the grid with electricity. The report refers to that. We may not be there yet, but it is something to aim for.
	The advantage is not so much in the amount of electricity that will be provided as—as the noble Lord, Lord Whitty, said at the conclusion of his remarks—in the fact that we need to bring people into a commitment. If people think that their own lifestyle can contribute directly to producing renewable energy—and by installing solar panels they can make a modest contribution, inconvenient though it will be to the large electricity generators—it will help to win their hearts and minds, as the right reverend Prelate urges us to do.

Baroness Sharp of Guildford: My Lords, I think that I am the first member of the committee other than the noble Lord, Lord Oxburgh, to speak in this debate. I would like to thank him for his chairmanship of the committee, which was admirable, and I thank the right reverend Prelate the Bishop of Liverpool for coming together with the noble Lord, Lord Oxburgh, to initiate this debate. I would also like to thank the clerk to the committee, Chris Johnson, and our two specialist advisers—Professors Anderson and Elliott. Together, we put together a very powerful report, which has already had quite a considerable influence on government policy.
	As all noble Lords who have spoken have made clear, the focus of this report on renewable energy emerged from the White Paper and from the urgency of the agenda for climate change. As the noble Lord, Lord Oxburgh, indicated, if this planet is to survive we cannot go on as we are. We have to cut back on carbon emissions and greenhouse gas emissions.
	It is very depressing that at present, if we look at the figures for carbon emissions, this country has been increasing them, rather than decreasing them, over the past few years. Yes, we have met our Kyoto targets, but we met those in the 1990s with the shift from coal to gas. Now, partly because of the very fast rise in transport emissions, total carbon emissions in this country are increasing.
	That increase reinforces our call in the report for the development of carbon-free technologies such as wind, tidal and solar power—which admittedly when one counts in the initial capital investment are not totally carbon free, but are so when working—and the carbon-neutral technologies of biomass energy. In the growing of biomass crops, the carbon being emitted is consumed.
	While the target priority must lie with cutting carbon emissions, other greenhouse gases are also important. I refer to coal mine methane emissions, which I believe the noble Baroness, Lady Platt, will talk about at greater length. Methane is 64 times more powerful in its emissions than carbon. That indicates why energy efficiency is so important. As the noble Lord, Lord Whitty, pointed out, the more we can cut back on our use of energy, the better. Many savings can be made through greater efficiency. It is the subject of the report the Committee is currently working on and which will be published before the House goes into Recess in July. It develops and carries forward themes in the current report.
	An issue that concerned us is the diversity of energy supply. The shift to gas means that we shall be very dependent on imported supplies from distant countries with unstable regimes. So the push towards renewables is urgent and in that regard it is clear that the committee has been critical of the Government not only for not placing enough priority on the push to renewables, but also for putting all their eggs into one basket, that of wind power. We have heard already the speech of the noble Earl, Lord Selborne, about biomass energy, and other noble Lords will talk about tidal and wave power. I also want to pick up on the noble Earl's remarks about microgeneration. It is an important means by which we can move quickly to make carbon emissions savings.
	I was pleased to note that the right reverend Prelate picked up on the issue of R&D spend. Yes, to their credit the Government have increased the annual spend on R&D from £40 million to £70 million, but if this issue is of the highest priority, is that really enough? I shall be interested to hear what the Minister has to say.
	The title of the report concerns the practicalities of renewable energy. By how much are the Government's targets practical? They are a 2010 target of a 10 per cent renewables contribution to electricity generation and the "aspirational" target of 20 per cent by 2020. We cast particular doubt on the 2010 target. The figures we had at the time showed clearly that in 2003, something like 3 per cent of our electricity was being generated from renewable sources, but half of that percentage came from hydro power and landfill which, under the renewables obligation, are not directly accountable. Only 1.5 per cent came from acknowledged renewables obligation sources.
	The figure given by the DTI for 2004–05 is 2.8 per cent. We must give credit for the gains made over the past couple of years and accept that the percentage is 2.8 per cent this year. But only 25 per cent of it comes from wind power. In their response, the Government placed a lot of emphasis on the 50 megawatts of new wind power that they expect to see installed during this year. So if 25 per cent of the percentage comes from wind power, it means that currently wind power makes a contribution of 0.7 per cent. Doubling that by the end of 2005 or the beginning of 2006 would take it to 1.4 per cent. Planning consents already in hand look like more or less doubling the percentage again. Over another two years, by 2008 we will have reached 2.8 per cent. But even if we add in the extra margin from other renewable sources, that is still a very long way off the target. We will have only two years in which somehow to make the leap from a renewables supply of somewhere in the region of 4 to 5 per cent up to that 10 per cent target. In spite of the Government's faith that they will meet the target, there are real doubts about it.
	I am glad that the noble Earl, Lord Selborne, mentioned Woking. What is being done there with CHP—a scheme based not on incineration but on gas—with the by-product being electricity—is good work. The electricity is sold to low-income people in the area and is run on a private network. That private network was a limitation. One of the barriers was that there could be only 3,500 subscribers to your private network. When we said that that was silly, and that the scheme should be expanded, the Government stated:
	"If the Committee's recommendation were implemented, there would potentially be tens of thousands of domestic consumers on unlicensed distribution networks without regulatory protection and without access to the competitive market".
	That is tantamount to saying that private consumers who pay 9.5p per kilowatt hour for their electricity would be pleased to know that they were benefiting from competition and not locked into a single supplier who was charging them 7p per kilowatt hour—which is what Woking is charging its users. Is that promoting competition?
	The other limitation is the question of tariffs—that when you generate your own electricity and put it into the grid, you receive the wholesale price of about 2p per kilowatt hour, compared with 9.5p. In Germany, it is the other way round. For every kilowatt that you put into the system, you are paid roughly four times the consumer price. Some of you who have travelled in Germany may have noticed that little windmills are sprouting up on many chimneys for precisely that reason. Some German commentators to whom we spoke felt that some uneconomic investment was taking place.
	Nevertheless, there are many technologies which we, as consumers, could invest in now. For example, a mini windmill can generate enough electricity to cope with standby power requirements, such as those of a refrigerator. Similarly, passive solar energy to heat water and solar panels on the top of office buildings to supply air conditioning are used in Woking. All of that represents unexploited potential. It is an area that we should examine in more detail and develop. I should be interested to hear what the Minister has to say about today's announcement that the Government are pushing forward on that front and precisely what they are planning to do.

Lord Haworth: My Lords, in my maiden speech to your Lordships' House in February in the debate on climate change, I expressed the hope that the Government would soon address themselves to restarting the nuclear programme. Some noble Lords found that a bit controversial for a maiden speech, but I had wanted to place that call in the wider context of dealing with the most serious issue facing the planet—namely, global warming. I also said that I would have liked an opportunity to say something about wind power in that context, but the shortage of time meant that I would have to leave it until another occasion. I think that this is that occasion.
	Since February, I have been coming up the learning curve. Then, I had been under the misapprehension that the development of renewables would mean their substitution for fossil fuels and other sources of greenhouse gases and that renewables would play a significant role in helping the UK to meet its international obligations under the Kyoto protocols and help us to lead others by example. I believe that most people think something broadly similar. I have to admit that it has only slowly dawned on me—chiefly in preparing for this debate—that that is not quite so.
	From a careful look at what is happening, it emerges that any increase in the percentage of electricity generated by renewables will largely be used to replace nuclear power. It will make no difference at all to the sources of climate change, unless one is content to say that it would be even worse if we did not promote those developments. But the situation should be getting better, not simply failing to get worse.
	The Science and Technology Committee's report notes that the mix of energy sources for electricity will have changed dramatically by 2020 and provides a description of where present policies will lead us. It would appear from paragraph 9.6 of the report that in 2020 we will have a mix of roughly 60 per cent gas, 15 per cent renewables, 15 per cent coal, with the remainder made up of small contributions from nuclear, oil, pumped hydro and electricity imports. The report points out in the very next paragraph, with massive understatement:
	"Meeting the Government's environmental objectives will be made much harder by the retirement over the next two decades of around 20 per cent of our present generating capacity that is carbon free—namely nuclear".
	Currently more than 20 per cent of our electricity is generated by nuclear power and considerably less than 5 per cent from renewables, with a growing emphasis on wind, and with the scope for growth in the immediate future almost entirely dependent on wind. The rest of our electricity production—from gas, coal and oil—is contributing big time to global warming. If we wind up, after an ambitious programme of developing renewables over the next 15 years, with more of our electricity generation contributing to global warming, not less, that will be quite perverse. I also think that the public, who are being sold renewables on the basis that they are green, may consider themselves to have been led up the garden path.
	I remain in favour of renewables in principle. Who could not be? Their development is to be supported because they are sustainable and conserve rather than deplete the Earth's resources. But I am not in favour of the role in terms of energy mix which they presently seem designed to play. I entirely agree with my noble friend Lord Whitty that renewables and nuclear together should replace the burning of fossil fuels.
	In Scotland, there are visible signs of growing opposition to upgrades of the national transmission system, besides the A9 at Drumochter Pass, for example, and further north still at the Dirrie More, the mountain pass taken by the road to Ullapool. "Highlands before Pylons" is the catchy name for the latter protest movement, and this is perhaps a good example on which to focus.
	If a massive wind farm is built on the Western Isles, the undersea cable must come ashore somewhere. This is perhaps the weak link in the plan. Huge pylons will be needed to carry the wires to the nearest point of connection with the National Grid.
	This electricity generation can bring great benefits to the Western Isles through a community fund which can be used to regenerate and diversify the local economy and have all manner of benefits. But to get the power to where it is needed could—will, on present plans—defile an area of outstanding beauty.
	When I retired last year as Secretary of the Parliamentary Labour Party, the MPs had a whip round and collected a substantial sum of money. They bought me a wonderful leaving present, now one of my treasured possessions. It is a big oil painting by one of Scotland's finest artists, James Hawkins, who has his studio at Rhue, just beyond Ullapool. He paints magnificent sceneries. Perhaps his best-known work is the very fine piece depicting the Great Glen; it hangs in Inverness Airport, welcoming visitors to the highlands. My painting is of Sgurr Mor Fannaich from Leckmelm. Leckmelm, on Loch Broom, is well known for its mature woodland garden and is a tourist attraction in its own right.
	When I look at my painting, every evening when I am in London, I ask myself if that lovely scene would be enhanced by a series of 50 metre high pylons and their wires marching across the landscape—bringing us renewable electricity, yes, but at a terrible price.
	Those who know the highlands will know that one of the most famous viewpoints in Scotland, where every tourist bus that ever visits Wester Ross makes an almost inevitable stop, is just up the glen. It is a superb view—straight down Loch Broom, from just above the also much visited Corrieshalloch Gorge. And this is the way the pylons are coming, to ruin the view.
	The report addresses this issue in Chapter 8, using a different example, namely the price to be put upon the loss of landscapes from transmission lines through the Vale of York. Referring to the questions involved, it says:
	"Given that the most widely used argument in favour of renewable energy is environmental, they will have to be answered at national level if public concerns are to be addressed".
	The next paragraph, paragraph 8.17, is printed in bold. I shall quote it in full:
	"'Planning' should not be seen as an obstacle. Planning and co-ordination at every level are in fact the preconditions for the effective development of renewable energy. Planning of this sort means a 'whole systems analysis'. The unresolved tensions within the Government's policies on renewable energy fall far short of this ideal".
	In the Government's response, we learn that the DTI has created a dedicated 2010 target team, which,
	"has responsibility for delivering the 2010 target and overcoming the major barriers to reaching the target".
	These barriers are listed as,
	"grid; planning issues; communications; finance and investment as well as looking after business development activities. Each barrier has a project team leader and project plan which details the barriers, and their sub-sets, and activity underway to remove the barriers".
	This is certainly a very focused approach. I am in favour of the Government having a policy, and having mechanisms to drive it, but the above approach sounds ominously like a stance which is intended to overcome any opposition, however legitimate.
	I would welcome an assurance from the Minister that officials will be encouraged to find ways of having a meaningful dialogue in their quest to overcome obstacles. There might be room for compromise or for alternatives to be considered when it comes to issues such as the routing of transmission lines through sensitive areas.
	For the Government's policy on renewables in general and on wind in particular to succeed, they will need public support for both the ends and the means.

Lord Jenkin of Roding: My Lords, I welcome with others the fact that this debate is taking place. It will of its nature be a fairly diverse debate because so many different issues are raised.
	I hope that the right reverend Prelate will forgive me that I do not follow his very eloquent speech as he outlined the pressing need to address climate change, but rather concentrate on one or two of the other detailed matters to which the Select Committee drew our attention. I make no excuse for that because, as with so much else—this has emerged from the speeches that we have heard—the devil is often in the detail. Although I may not follow exactly what the noble Lord, Lord Haworth, has said, he has put his finger on one of the details: the problem of the transmission of electric power from renewable generators to customers through the grid.
	The noble Lord spoke about the environmental aspect—I had not previously heard "Highlands before Pylons", but I shall treasure it—but I shall look at the other aspect which flows from the nature of wind power; namely, that it is intermittent and will have a progressively more serious impact on the operation of the grid. I shall turn latterly to a second question on that, but I shall come to it in a moment.
	The Select Committee dealt very fully with the problem of the intermittent nature of wind power, in chapters 6 and 7 of the report. In paragraph 6.16, it highlighted it as,
	"an issue of major importance",
	and gave proper attention to it.
	The problem arises because intermittency inevitably gives rise to uncertainty of supplies. That adds to grid costs because of the need for back-up. In a very trenchant paragraph, in box 13, the committee referred to,
	"a law of diminishing returns: the amount of conventional generating capacity that can be displaced by intermittent generating capacity falls proportionately as the absolute amount displaced increases".
	There is a generally accepted view that up to 10 per cent of wind penetration can be managed fairly simply without undue difficulty to the operation of the grid. But as the figure goes beyond 10 per cent, the strains on the system become increasingly serious.
	I was privileged a few days ago to be briefed by a couple of senior operational managers of the National Grid company. Their message was very clear: they entirely corroborated what the Select Committee had said about the matter—indeed, their evidence may have been the source of it. They pointed me in the direction of Germany, where wind penetration has now reached the figure of 16 per cent. They cited it as an eloquent example of the problems that it causes the operation of the grid. Wind power can sometimes fall by hundreds, or even thousands, of megawatts, in the course of just two or three hours, which requires the immediate mobilisation of fossil fuel generators to meet demand, with consequent major increases in emissions.
	But there is the other side of the problem as well, as exemplified by Denmark, to which the managers at the National Grid also drew my attention. If there is a full supply of wind, and the wind is blowing neither too lightly nor too hard, at a time when electricity demand is low the resulting excess has either to be sold across borders or the turbines simply have to be switched off.
	In Denmark they have the opportunity to sell it. But what happens? They produce their wind power very expensively—and the Danes have the highest electricity charges in Europe, both to industry and to householders—and when they cannot use it themselves they sell it at a loss across borders to their neighbours in Sweden, Norway and elsewhere. The Danes have naturally enough become pretty cross about that, because what they are effectively doing is not only subsidising their neighbours by selling them cheap electricity but allowing those countries to store up their hydro when they do not need to use it, so that when they have a high demand and no wind, they have hydroelectric power. So it is not surprising to learn that the Danes have stopped building wind farms.
	I saw a report recently that was put to the Whinash public inquiry, which said that,
	"the problems of imbalances . . . will almost certainly be repeated in the UK".
	So what does the Government's response say about that? There are some advantages in having an original and a revised response. Paragraph 119 of the revised response says:
	"The Government agrees with the Committee that there is a need to improve our understanding of the technical implications of high levels of wind generation connected to the electricity networks".
	They go on to say that they have appointed the Joint Government/Industry Electricity System Issues Steering Group to oversee work by the NGC and others. They hope that that report will come,
	"in the next few months".
	But the corresponding paragraph in the original response, published in December last year, said that they were expecting that report early in the new year—that is, early in this year, six months ago. We are now told that the report will not come for a few months.
	Here we have, as the Select Committee said, perhaps the major issue in the operation of the grid in relation to wind power, and the committee's report seems to have slipped by nearly a year. Why is that? Is it a manageable problem or one which will present us with considerable operational difficulties? I do not find the revised response in the least bit persuasive, and it gives the impression that Ministers do not really seem to have taken on board the seriousness of the issue. I hope that the Minister this evening will give us some more comfort on that matter.
	The second point that I wish to raise very briefly is the question of transmission from remote renewable generators. The Minister will recognise that I asked him about that matter at Question Time earlier this month on 13 June. When discussing the Bill Parliament agreed to allow substantial additional subsidy for that transmission, I have to say against the advice of Ofgem. I asked when that would happen. The noble Lord, Lord Haworth, has given us one reason why that is not happening. The Minister gave the following reason on 13 June when he said that,
	"one of the important issues with achieving our target for wind power and renewables is that we do not have problems with the upgrade of the transmission lines, particularly from Scotland. Those are now going ahead"—
	but here is the point—
	"but there is obviously the question of where the costs fall".—[Official Report, 13/6/05; col. 1065.]
	Here we are a year after the passage of the Act and a year after the new subsidy was agreed but, so far as I can see, none of these lines is being built because there is no agreement regarding where the costs fall. I hope that the Government will give us some comfort on that matter because offshore wind is one of the things that they are really hoping to press. However, if there is no transmission, there will be no offshore generators.

Lord Methuen: My Lords, I, too, would like to thank the noble Lord, Lord Oxburgh, for his very capable chairmanship of our committee, and for introducing the debate on the report. I thank the right reverend Prelate for his Motion.
	None of us is in any doubt about the reasons for cutting back on emissions due to energy use. I for one read the recent interview with the noble Lord, Lord Oxburgh, in the Guardian newspaper with great interest. It is depressing to note his conclusion that even if we achieve the Government's targets for the reduction of CO2 emissions by 2020, our good efforts are likely to be swamped by the emissions of energy hungry developing nations, particularly India and China, as other speakers have said.
	We published our report this time last year. The initial government response was weak and the revised government response is welcome.
	I had the privilege of being a member of EU Sub-Committee B when it reported on renewable energy in 1999. On both occasions that we visited Denmark it was interesting to note the change in the attitude of the Danish Government to wind energy. The previous Minister had been a very powerful character in its promulgation but that is not the case with the current government.
	The remit of our committee was to look at the practicalities of the Government's programme for renewable energy. There was almost universal disbelief on the part of those we spoke to in our ability to achieve the ambitious targets that the Government had set. The only mature technology capable of meeting those targets is obviously wind power. However, the visit to Woking showed what could be achieved by large-scale use of photovoltaic and other means by a committed public body. It was also interesting to note that at one point there was a major power failure in Woking and Tesco had to shut down for a considerable period at very considerable cost. However, the Woking borough offices and its customers continued to operate quite happily.
	As the right reverend Prelate pointed out, energy efficiency, its use and conservation must not be ignored. A recent Written Answer by the Minister to the noble Lord, Lord Dixon-Smith, emphasises the discrepancy between the thermal energy inputs and electrical energy outputs of our power stations. This indicates a thermal efficiency of about 38.7 per cent and a corresponding wastage in excess of 60 per cent.
	CHP systems, where practical, can raise the thermal efficiency to more than 70 per cent. Our take-up of CHP in this country is pathetic compared with our European counterparts, and the Government should do much more to encourage CHP schemes in our major urban areas where they are practical.
	Regarding our report and the revised government response, I am glad to see that they welcome many of our proposals, and that they have moved to tackle some of the obstacles to the achievement of their targets. The planning regime, the need to enthuse the local populace—perhaps by beneficial pricing due to the lack of transmission costs—and the need to satisfy MoD safety concerns, are critical. I am glad to note in the government response that the MoD has become less dogmatic in its opposition to wind farm schemes.
	Large-scale offshore wind farms, such as the committee saw at Horns Rev in Denmark, are an obvious solution, and it is good to note that similar developments are now coming on-line in the UK. It is also welcome to note that the Swansea Bay tidal lagoon system is being more actively considered. R&D funding is vital for the less mature technologies, and I welcome the £500 million to be spent between 2002 and 2008, as the right reverend Prelate mentioned. Will the Minister elaborate on how, and on what technologies, that money might be spent?
	I am particularly interested in marine systems for power generation, but as an engineer I am highly sceptical of the long-term viability of reciprocating wave generators in a harsh marine environment. However, I welcome the other initiatives in the marine sphere and the ongoing research into them. I still have concerns with system stability and the position of the distributed network operators with substantial distribution generation at the local level. There must be technical limits, at about 20 per cent penetration of wind power, due to the type of generators used. There is also the requirement to maintain security of supply on occasions in both winter and summer when there is no wind. That has been touched on by other noble Lords.
	That implies that for security of supply we must have other reliable base load generation currently filled by our existing coal, gas and oil-fired power stations and the 22 per cent input from the existing nuclear power stations. The progressive closure of all our coal-fired power stations and the closure of all nuclear generation by 2023, except for Sizewell B, will leave us almost totally dependent on oil and gas imports from Russia, the Ukraine, and other states that may not be as politically stable as we are. Not only that, but for Russian gas we shall be at the end of the pipeline, and anyone else on the other end can turn it off and we will get none. Furthermore, we shall be competing in an increasingly competitive marketplace for diminishing supplies at an increasing price, which must in turn substantially raise our generation costs.
	For the UK to abandon nuclear electricity generation in that scenario is madness. Renewables can supply only a minor portion of our requirement, and nuclear is the obvious candidate for base load generation. New designs such as the BNFL Westinghouse AP1000 reactor are now ready for exploitation, but I understand that there is a serious risk of the intellectual property rights for that design being lost to the UK and sold to the US, thus losing the benefits of our accumulated design expertise. Will the Minister comment on that?
	A balanced energy policy with a diversity of reliable energy sources is essential for the future of our country. Due attention must be paid to energy conservation and efficiency, not only in its domestic and industrial use but also in transport, an area in which we have done much too little.

Lord Cameron of Dillington: My Lords, any energy debate is bound to cover a wide range of issues, both in saving power and producing it through environmentally beneficial means. I shall focus on one rather narrow, but possibly far-reaching, aspect. I want to draw your Lordships' attention to a form of renewable energy that could play as large a part as wind power, but in a non-intermittent form, while at the same time virtually removing the costly and harmful need for any landfill of waste in this country. That is killing two birds with one stone; or a double-whammy, as the noble Earl, Lord Selborne, would say. Noble Lords might think that is an ambitious proposition. A small company called Compact Power in Avonmouth, in my neck of the woods, is showing the way. For the avoidance of doubt, I do not have any shares or any other connection with the company.
	Compact Power has developed and put into commercial operation a world-leading small-scale pyrolysis and gasification plant that is capable of extracting renewable energy from all non-inert wastes except nuclear wastes. The Renewables Obligation Statute allowed for,
	"Newer, cleaner technologies such as pyrolysis and gasification to generate electricity that would qualify for ROCs to the proportion of the waste used that was non-fossil fuel derived".
	For example, when processing municipal solid waste, about 68 per cent would be "non-fossil fuel derived". Thus 68 per cent of the electrical output would earn ROCs. As noble Lords will be aware, electricity generated by incineration, which has been favoured to reduce our current over-reliance on landfill, does not qualify for ROCs.
	The UK produces about 80 million tonnes per annum of non-inert waste, of which about 87 per cent is currently landfilled. The existing commercial Compact Power plant at Avonmouth is a single-module cooker, as it were, that can process about 8,000 tonnes per annum. Compact Power is about to build a new four-module plant at Avonmouth, which will process 32,000 tonnes per annum. Possibly the optimum plant size is eight modules, although the great advantage of the modular format is that you can add or subtract modules to fit local circumstances. An eight-module plant can process 64,000 tonnes per annum and generate four megawatts per hour, of which 68 per cent on average would qualify for ROCs.
	The process produces neither dioxins nor toxic fly ash. The waste is reduced to 15 per cent bottom ash, which is safe for use mixed with aggregates and for certain building materials. There would be near zero landfill, which would greatly reduce the amount of landfill-generated methane, which is deemed to be 21 times more harmful than CO2.
	A plant of 64,000 tonnes per annum would be ideal for about 100,000 people—a typical district—after the extraction of the maximum amount of waste that could be recycled or composted. With a population of 60 million, the UK could build 600 district level pyrolysis and gasification plants that would generate 2.4 gigawatts per hour, which is about 6.7 per cent of the UK's average electricity demand. However, a recent report by the Institution of Civil Engineers and the Renewable Power Association shows that the potential electrical yield from those wastes, if processed at the highest yield rate, could account for as much as 17 per cent of total electricity consumption by 2020. They admit, however, that meeting those highest yield rates is an unlikely reality even by 2020. Nevertheless, 10 per cent of our electrical needs would be worth it, especially if we also meet our EU landfill diversion directive obligations and can thus trade our surplus allowances to other member states.
	Furthermore, those community-level micro power plants would reduce dramatically the amount of electricity lost in transmission from remote sources of power. That has already been mentioned as a problem. The losses are currently estimated to be about 10 per cent per 100 miles. The plants would also reduce waste haulage; 10 per cent of all trucks on the roads in the EU currently haul waste. Therefore, congestion and vehicle emissions would be helped.
	The district-level plants are considerably smaller than the mass-burn incinerators, which typically require an 80-metre stack and gravity feed. The district-level plants of the sort that I advocate would sit in a building no larger than a double indoor tennis court, with a small aluminium stack a little more than five metres above the roofline. Construction and commissioning time is 15 months. That compares to a three-year construction time for a large incinerator, which would also take longer in the planning process. The small size of the district-level plants will enable them to be collocated with other businesses in, say, a business park, where best use can also be made of the secondary heat from the processes. Unfortunately, there are still no renewable heat certificates available.
	Meanwhile, the emissions are a mere 10 to 15 per cent of the new tougher EU waste incineration permissible levels, so the plants make good neighbours. Also, adopting a district-level integrated waste management strategy would achieve the Government's proximity principle better than a policy based on larger incinerators, with their bigger catchment areas.
	There is a question about joined-up government here. It is a problem that the DTI handles energy but that Defra is responsible for waste. Even within Defra, there is confusion as the former MAFF part of Defra handles farm waste and has confused biomass for energy crops in the farm slurries, whereas biomass is the biodegradable portion of any type of waste. These compact power plants can take most forms of waste, including old tyres, sewage sludge and clinical and hazardous waste such as half-used pots of paint, used oil and so forth. In rural districts, they could be co-fired by energy crops grown by local farmers—again minimising travel distances. It is worth noting that the normally excessive costs of running power-producing plants purely for such farmers are offset or subsidised by the money charged for handling urban and industrial wastes. I might add that the processes involved avoid the technical problems encountered by the ARBRE plant at Eggborough.
	I believe that renewable energy from waste could play as large a part as wind power in reducing the UK's dependence on fossil fuel, while having the advantage of being non-intermittent and virtually removing the need for costly and environmentally damaging landfill in the UK.
	We undoubtedly need a mix of renewable energy, ideally with as much as possible that is not-intermittent. But as a proven technology, given the political will, the network of district level plants, which I have described, could be in place by 2010, while other renewable technologies, such as wave and tidal, are developed for the 2010 to 2020 period.

Baroness Platt of Writtle: My Lords, our committee was very disappointed with the Government's first response to our report. Since then, we have received a much better response from the new Minister for energy.
	On a number of matters, we are in agreement in principle with the Government. The threat of climate change is a real one and we need to reduce our consumption of fossil fuels, which leads to greater production of carbon dioxide in the upper atmosphere and therefore the development of global warming.
	The UK has a responsibility in this field, as does the EU, but we are aware that the rest of the world, especially India and China, must also reduce their production of CO2. In reducing our production, we must be careful of our UK industry, with its emphasis on economy in this field, or we could see overall increases in global warming contributed by other countries which, for instance, are still using dirty coal.
	The associated debate introduced by the right reverend Prelate the Bishop of Liverpool is also taking place now, but I will, if he will forgive me, reserve my contribution until our report has been produced soon. Our overriding recommendation is for one Minister to be responsible for security of supply. The Government, in their Energy White Paper, put forward four aims which the House of Commons Select Committee criticised strongly. The Government accept that there is tension between these goals and have now made Malcolm Wicks responsible for energy issues, with a particular focus on sustainability. The responsibility for security of supply is still shared with Ofgem.
	The recent blackouts in New York, California and Italy illustrate the serious nature of these effects on industrialist societies. I hope that security of supply will rise on the Government's agenda and that the Minister will have final responsibility for ensuring it. The day the lights go out in people's homes, together with their domestic machinery, when industry is disastrously affected, hospitals put out of action and electrically operated trains stopped is too dreadful to contemplate. Someone has to carry the can.
	The committee welcomed the use of wind power as a renewable source, but at the same time recognised that there are several snags in its use. In the first place, it is intermittent, but, unlike tidal power which occurs regularly twice a day, wind power is both intermittent and unpredictable. In January, it would be possible to experience an anticyclone lasting several days when there would be very little wind power available anywhere in the UK at a critical cold time. The vital point, in conjunction with reliance on wind power, is to have efficient, firm and available standby power.
	Our North Sea fields of oil and gas are rapidly diminishing and in the foreseeable future we shall be a net importer of fossil fuels. Gas will have to be pumped thousands of miles across several countries, and could be subject to sabotage. Of course, it will also produce CO2.
	I am glad that the potential use of nuclear power is rising on the agenda. The Government have appointed CoRWM to report next summer on the safe storage of nuclear waste. That waste has to be dealt with in any case. It will not go away and needs an all-party agreement on its permanent, safe storage, probably deep underground, for several thousands of years. In the mean time, nuclear power does not produce CO2.
	We have a good record of safety in this country in our nuclear power stations. We must plan ahead for future use of nuclear power and continue to develop our professional skills in that area. We cannot afford to lose them. If we do not take action ourselves, we shall probably import nuclear power from France, where 70 per cent of the country's power comes from that source. It certainly needs to be exempt from the climate change levy here.
	Wind farms, of course, are controversial, as they are likely to be placed in beautiful environments which people will not want ruined. They will need roadways, lorries and cranes for their construction, both onshore and offshore and that consumes energy. Most of the sites are in the north of our country, while the greater use of electricity is in the south, so the distribution system will need strengthening again across open countryside for the electricity to be delivered safely to its users, which will probably also be controversial locally.
	All this lends emphasis to the need for diversity, both technically and geographically, in renewables. I am glad that the Government are now taking much more interest in tidal power and will look again at the provision of a tidal lagoon at Swansea. If that were successful as a demonstration project, other lagoons could be constructed elsewhere. The provision of the £50 million Marine Renewables Deployment Fund will help.
	We recommend using coalmine methane rather than allowing it to leak into the upper atmosphere as a bad greenhouse gas. The Government have now exempted it from the climate change levy and in the future I hope it will be exempt from phase two of the European Union Emissions Trading Scheme. They are also considering the case for extending eligibility to energy from waste projects. Those polices will help to promote renewable diversity.
	We recommended the use of biomass, accepting that it is heavy and needs to be available nearer to the power stations where it is used, otherwise energy is used in its transport. The Government have responded more favourably to that idea. They say applications have increased as a result. They are also accepting the use of those fuels to create heat as well as electricity, which is another vital point which should encourage the use of community heat and power by local authorities in new developments.
	Solar power in Britain can be expensive, but there is no doubt that its application to navigational aids and installations such as parking meters, bus shelters and street lighting is valuable where there are allied savings in maintenance of fuel supply. We welcome research on energy storage, but as the Renewable Energy Foundation says it is never likely to be capable of storage on an industrial scale.
	Finally, we welcome the Clear Skies £10 million DTI-funded initiative to enable local authorities and schools and so on to benefit locally from energy saving projects—another of our recommendations. Schoolchildren coming home and turning lights off to save energy can set habits for present and future generations. Personal benefit is an excellent encouragement; the carrot is better than the stick.
	A lot of people in this country do not appreciate the vital need for economy in the use of power and the elimination of its waste. No one can relax his efforts. I underline that our emphasis in our report is on practicalities. That means action by the Government in all these fields, not just words.

Lord Chorley: My Lords, I sympathise with my noble friend Lord Oxburgh and other noble Lords in deploring the delay in discussing his committee's admirable and practical report. A further six months elapsed before the Government's rather complacent response was produced. I do not know whether it is a record that there had to be another response last Monday.
	I propose to comment briefly on two aspects of the wind energy issue. That is a rather narrow front, but, as far as I can see, it is the only show in town for the Government, at least for the next 10 years. My first point arises from the issue of reliability of supply and the interesting lessons the committee learnt from its visit to Denmark and from the subsequent studies by Mr Sharman—who is referred to by the committee—on the Nordic-German interconnection system. To me, they were a real eye-opener. I fear that I must restrict myself to one aspect of them only, and I shall touch on the interesting points made by the noble Lord, Lord Jenkin of Roding, in connection with intermittency and reliability.
	Much is made of the problem of back-up. However, I am sure that the more interesting issue is not the probability of no wind or too much wind, but the situation that arises when the wind turbines have to be curtailed because of lack of demand. The noble Lord, Lord Jenkin, referred to this. The real difficulty of balancing the system under any of these circumstances when the wind capacity is greater than 10 per cent of the total system capacity is well known. It was referred to in the report and by the noble Lord, Lord Jenkin.
	Perhaps less appreciated is the effect on load factors. The committee quotes a 21 per cent load factor for Denmark and the same source, Mr Hugh Sharman, has arrived at a figure of 16 per cent for Germany in 2003. As I understand it, that is for the interconnected system of Denmark, Germany, Sweden and Norway, which is quite a big system. Nevertheless, the committee thought that 30 per cent would be a fair assumption for the UK. They may be right, but there are all sorts of factors involved. However, 30 per cent is surely a pretty low load factor by any standard for any capital-intensive plant, and it is difficult to think of plant that is much more capital-intensive than a modern wind turbine.
	But that is not the real point. Surely, the sole rationale for this expensive electricity is CO2 avoidance? Therefore, as load factors fall to 30 per cent or below the CO2 saving falls pari passu and the CO2 rationale goes out of the window, as it is reduced. Furthermore, the profitability of the wind farms will also be diminished and there will be a much higher degree of uncertainty. That may well affect future contractors, and I was interested in what the noble Lord, Lord Oxburgh, had to say about it in the medium-term future.
	Presumably that risk factor will be all the greater for offshore because of the greater investment required. And note that these risks do not arise from there being no wind or too much wind, but from the conflicting interplay between demand and supply, minute by minute, which results in curtailment. There are huge diurnal variations in demand that simply have to be balanced—coped with. When you have a lot of wind capacity on the system, the number of occasions when the wind energy output has to be curtailed obviously increases; at some point they will increase dramatically.
	I turn to my second topic, the landscape and planning issues. Here I find myself very much in agreement with the noble Lord, Lord Haworth. I was pleased to note that in paragraph 8.15 the committee agreed with the evidence submitted by the CPRE that,
	"policy on renewables development should . . . sit within a wider framework of land-use policy at all levels of strategic planning".
	I am sure the committee is right when at paragraph 8.19 it states:
	"We do not believe that urging developers to engage in"—
	to quote PPS22—
	"'active consultation and discussion' will in itself secure public support".
	I do not think that the committee realises the real horror and the fierce objection of local communities to these huge industrial monsters on their doorstep. The new generation of these behemoths will be bigger than St Paul's and will almost reach the same height as the top of the spire of Salisbury Cathedral. As we all know, that can be seen for miles in all directions.
	It is not just a matter of local objections. Many of these new or proposed wind farms are in fine, open, upland landscapes. Again, the noble Lord, Lord Haworth, referred vividly to this in regard to the Highlands. The new generation turbines simply dwarf these landscapes. Little consideration has been given to the environmental effect of the massive road works that are nowadays necessary or—again, as the noble Lord, Lord Haworth, said—the grid systems which have to connect them. Anyone who has been, for example, to the Cefn Croes wind farm in north Wales will know exactly what I mean on that point about the road works.
	This is not just Nimbyism on the part of local communities. The danger to the enjoyment of these wild landscapes concerns everyone. It is a national concern. Nor is it just a technical question of designated landscapes, that is to say, national parks, AONBs, SSSIs and so on.
	It is a matter of concern that the admirable concept of buffer zones in the old PPG22 has been emasculated by the new version in PPS22. The goalposts have been moved with a vengeance. That is all justified in the name of sustainable development. Yet protecting fine landscape is just as much within the Government's own definition of sustainable development in PPS1 as is producing clean energy.
	There are, moreover, wider and more direct consequences—the effect on tourism and the local economies. Many wind farm sites lie on the edges of national parks. Other fine landscapes are involved. Tourism is increasingly becoming the most important economic activity. The sight of these massive structures can hardly be said to enhance the appeal of the attraction for open-air activity of all sorts—the walkers, the climbers, the boaters or even just the ordinary motorist—in these areas. If you lose the tourists you lose a lot of local GDP. That is against a background of declining agricultural prosperity. These upland areas are weak economies and we should not put them further at risk.
	If we are not careful we will put at risk the livelihoods of the people who live in these fragile rural economies. And we will do so to achieve a distinctly modest abatement of CO2 emissions, achieved only at a considerable cost to electricity customers. Can we not be a little more holistic and a little more joined up?

Lord Davies of Oldham: My Lords, I am sorry to intervene, but we must conclude our speeches as soon as eight minutes shows on the clock. We are five minutes overdue at present; that is reducing the time in which the Minister can reply.

Lord Winston: My Lords, I was sorry to hear that intervention from the Front Bench, as this is possibly one of the most important debates that we could have at this time. It is really rather shocking that it has been limited to three hours, when so many experts have spent the best part of a year considering an issue facing not only our society but that of the world.
	I am grateful to the noble Lord, Lord Oxburgh, for his excellent chairmanship of the committee, and for the expert advice of Professor Dennis Anderson and Dr Chris Elliot, who were immensely helpful during the preparation and maintenance of our inquiry. I also want to draw attention to the Select Committee's report of 2000, chaired by the noble Lord, Lord Jenkin, Science and Society. He drew attention to something of extreme importance to our deliberation. That is that we face a growing suspicion of technology in Britain. The 1999–2000 report was effectively stimulated by the crisis over CJD, but since then we have had the triple vaccine, problems over nuclear waste—which are not being effectively answered by government—foot and mouth disease and many other scientific issues.
	Among the most important scientific issue ever to face our society is global warming. In fact, at a science conference for the public just a week ago in Cheltenham—the science festival—the government's chief adviser, Sir David King, suggested that it was the most important crisis facing the world today. It was interesting to see how many of his audience, all lay people, agreed with him. I am very glad that the noble Lord, Lord Chorley, and my noble friend Lord Haworth have already drawn attention to this problem, but I want to draw attention to only one paragraph in our report. We recommend to the Government themselves to initiate and promote full and public dialogue both at national and local levels on the advantages and problems of renewable energy.
	Frankly, the government response to that small but essential paragraph is lamentably poor. The DTI refers us to its website, "It's Only Natural", at www.dti.gov.uk/renewables. I suspect that few people in the United Kingdom would bother to dial up that website, to which I shall return in a second.
	People now generally agree that global warming is a problem—incidentally, at the Cheltenham science festival, on a vote, 92 per cent of the audience recognised it as being very important, probably as important as any other scientific issue facing us—and that was before Sir David King spoke and that non-scientific audience had had a chance to hear what he had to say. It was also interesting that more than 50 per cent of that audience—as I have seen at other science festivals—supported nuclear power.
	By comparison, almost 80 per cent—as the Government have reported from the result of their MORI poll—are in favour of wind power. But once deliberation went to the understanding of wind power, it was clear that few members of the public have a clue what are likely to be its real disadvantages and limitations, as we have heard so eloquently described this afternoon.
	My noble friend Lord Whitty, in his brave speech, if I may say so, said something very important. He said that behaviour will not change of itself. He called for more regulation, for fiscal methods, market changes and so on, all of which I think are absolutely correct if we are to have better energy efficiency and use of power and some way out of the morass that we face.
	However, for that to be accepted, we must also have public engagement. As far as I can understand it, the Government's idea of public engagement is a kind of loose communication typified by the website. The website features four areas of public news. In the "events" section, it draws attention to conferences; trade promotion service events; the Regional Heartlands pilot tour; and the renewable energy science quiz. The website mentions, I think, five events—one in London, one in Aberdeen this year, one in Paris, one in Germany and two in China. In the trade promotion events section, which will be of limited interest to the public anyway, it lists one in England, one in Aberdeen, two in China, one in France, one in New York, one in Malaysia and one in Toronto. When you click on "Regional Heartlands Pilot Tour", the website tells you:
	"The DTI renewable energy tour is now over. Please check this page regularly for further information".
	That message also applies to the renewable energy quiz science venue tour.
	I am afraid that we are not taking public engagement seriously, and that is a good example. In any case, engagement does not mean just simple education by communication; it means listening to the response of the public. It is not a cheap endeavour; it requires expertise. At present, we are not having any dialogue. We are having very limited communication and, above all, the Government have taken no steps, as far as I can see, to measure the impact of what they are doing in public education.
	We need to tackle the issue in the schools. This year, I have given talks in, I think, 18 or 20 schools to pupils of all ages—from primary school to A-level—so I think that I know something about what I am saying about science understanding. It is clear that children learning from the national curriculum have no concept of the disaster that might face them in two or three decades' time. That is our responsibility, and it is what the Government must focus on and come to terms with, as they speak to and listen to the public.

Lord Dixon-Smith: My Lords, I join other noble Lords in thanking the noble Lord, Lord Oxburgh, and the right reverend Prelate for initiating this debate. Energy policy, if it is driven by anything nowadays, must be driven by sheer necessity, if we wish to do anything about climate change. It was a particular pleasure this afternoon to hear the noble Lord, Lord Whitty, with whom I have argued on so many occasions, and to find myself, for once, in wholehearted agreement with him.
	We already have a deep problem in this country. We have moral pretensions to lead others on this issue. I would not have a problem with that, provided that I felt that we were genuinely leading. The awful truth is that, only two days ago, a press release from the European Environment Agency showed that carbon dioxide emissions increased throughout Europe in 2003 and that the largest contributor to that was the United Kingdom. We cannot hold our head high in the international forum, if that is the situation.
	I hope that the noble Lord, Lord Oxburgh, will forgive me if I concentrate my remarks on the right reverend Prelate's proposition. I have had the privilege of serving on the Science and Technology Select Committee; the committee members develop an expertise that I have no pretensions to keep up with. However, there is congruence.
	The first point that I want to make concerns an installation called the South East London Combined Heat and Power plant. It is a state-of-the-art installation created 10 or 12 years ago. All the planning obstacles were overcome to provide an installation that would incinerate waste and provide electricity and provide heat to the houses with which it was surrounded. It was a remarkable planning achievement.
	The plant has worked very effectively. Waste has been disposed of and electricity has gone into the grid. But not one single house has received any warmth. There was no agreement between the site owners and the local authority on how that difficulty should be overcome and who would be responsible for plumbing the heat round the area. Unfortunately, there was no regulatory system to give any encouragement or inducement and there was no financial inducement to bring it about. That is a scandal. I was amused on speaking to someone at lunch today. He lived close to the site of the old Battersea power station and his apartment was still plumbed to receive heat. Unfortunately, there is no longer a power station there to provide it.
	I turn to a different scandal in which we all, in a sense, share the blame. The noble Lord, Lord Methuen, has remarked on my recent Written Question to the noble Lord, Lord Sainsbury, and the Government about heat waste from power stations. I asked how much heat was dispersed to the atmosphere. It is worth reading out the reply:
	"For the UK as a whole, in 2003 electricity generators' fuel inputs . . . totalled 86.66 million tonnes of oil equivalent, which is . . . 1031.1 TWh".
	One terawatt hour equals one billion kilowatts, which means that we add nine zeroes to the positive digits. It continues:
	"For the same period, total generation . . . production less pumped storage . . . was 398.8 TWh. From this it may be inferred that 632.3 TWh [of energy] . . . was used in the generating process".—[Official Report, 20/6/05; col. WA 152.]
	Now there is a question of exactly how much of that was the generating process and how much was waste heat. My guess is that it all escaped as waste heat.
	What does that really mean? Who understands what a terawatt hour is? It means that when I switch a one kilowatt heater on to warm a room in my house, I pay for the electricity generating industry to use another one and a half kilowatt hours of power in order that I receive my one. When I think about that I find it very difficult to think that we are running an efficient system and, in the modern context, running an ethically sensible system.
	I have to accept that there is not much one can do about that. We are dealing with a history where all of the power stations have been put in the most remote parts of the country. Although heat can be moved about, it cannot be moved that far. Of course, there could be a response. The Government could say clearly that in all future planning matters, energy will be an overriding factor in planning decisions. In particular, that ought to be the case for electric generating plant. It gels with paragraph 3.22 of the committee's report, which states:
	"A further consideration, strictly speaking outside the scope of this Report, is the fact that CHP generators allow biomass, or for that matter any combustible fuel, to be used more efficiently, producing overall energy efficiency of around 80 per cent, rather than the efficiency of generating electricity alone, which is typically between 30 and 40 per cent".
	The fact is that when things need to change, the greatest obstacle is past practice and, more importantly, past investment. I have to accept that there is not much that can be done in a hurry about these matters. But something has to be done. I have to say to the noble Lord, Lord Haworth, who expressed concern about the Highlands, that I have considerable doubts about the benefit of generating electricity in the outer isles to supply London, as it would involve huge transmission costs and losses. We must radically review our approach to electricity generation.
	I have an aspiration different from the Government's target of a 60 per cent reduction in 1990s carbon emission levels by 2050. My aspiration is that there should be zero mineral hydrocarbons by 2050. I know that I will not live to see it, but it should be our target if we are to behave responsibly and get global warming under control. Anything less will not achieve that goal.

Lord Tombs: My Lords, I want to concentrate today on one simple question: why do we need renewable energy? The answer seems obvious: it is because of the fears of global warming and resultant climate change, and also, in government eyes at least, because of our Kyoto commitments.
	But now the question begins to get more complicated. Perhaps we should first ask why our national efforts are concentrated on wind power, demanding huge subsidies met by the electricity consumer alone, despite the fact that replacement of fossil fuels by renewable sources is a national policy. No measures are proposed to apply a levy to gas or transport users to enable their fuels to be replaced or even used more efficiently. How can that be, given that transport is the most profligate producer of CO2 and that gas is a direct competitor of electricity in some fields?
	The answer is, I think, both simple and discreditable. It arises from the fact that wind, the most readily available renewable energy source, finds its outlet through electricity and so can be easily promoted through electricity regulation. For the Government, that provides a very convenient and rewarding source of funds not subject to Treasury scrutiny—a degree of freedom never previously experienced by spending departments, and an unforeseen and unfortunate consequence of the privatisation of the electricity industry.
	As a result, the renewable energy effort is very incomplete, despite the fact that some government resources are available for development projects. Those projects, many of them familiar to us for several decades, are a long way from commercial exploitation and will certainly prove very expensive.
	But since wind is the only practical game in town at present—in the Government's eyes at least—let us dwell for a moment on its economic situation. The Government's own estimate is that the subsidy, not the cost, of wind power until 2020 will be some £30 billion. The fact that such a sum can be spent in that way stems in part from the lack of Treasury oversight but perhaps more from the freedom of multiple departmental committees to reach consensus conclusions in what might be generously described as a policy vacuum with no effective ministerial leadership.
	We are all familiar with the description of a camel as a horse designed by a committee. Given the plethora of committees involved in renewable energy, one might expect their outcome to be a white elephant, or perhaps a herd of white elephants. In that connection, and in an effort to put the wind subsidy of £30 billion in more accessible terms, let me point out that that sum would provide 40 Millennium Domes or 1,200 brand-new city academies.
	Diversion of resources on that scale can only realistically render the UK less competitive with its overseas competitors. We are all aware of the development plans and potential of, for example, India and China, to say nothing of established industrialised countries in Europe and America.
	We are unique among those countries in our efforts to restrict CO2 emissions and there is no reason to expect that our approach will be mirrored by others. Are we then involved in a gigantic quixotic gesture without regard to our international competitive position? If so, then let us at least acknowledge that we are prepared to sacrifice our economy in a way that will have a minimal effect on the world's problem—a quixotic gesture indeed.
	An approach that would simultaneously address the problems of climate change and international competitiveness would be the acceptance of a renewed nuclear power programme. Our present programme, which has served us safely and well, is nearing the end of its commercial life, with a resulting inevitable increase in CO2 emissions exceeding the promise of the renewable energy aspirations. We need leadership to promote the only available solution to the need for CO2 reduction at an affordable cost. Let me say—I have said it before—that a nuclear programme to save the same amount of CO2 as that hoped for from wind generators would cost in total less than half the subsidy envisaged for wind generation.
	What kind of fantasy land are we living in? I know the Government will say that the PIU report of 1992 did not conclude that nuclear power was cheaper than wind power. I have read that report and I found it astonishingly superficial and na-ve. There are authoritative analyses of comparative costs available world-wide which deserve—but do not receive—serious and professional evaluation. Not least of those reports is that of the Royal Academy of Engineering last year.
	There is a need for a more open-minded approach in government to this problem and I welcome the rumoured intention to revisit the policy which has led to the exclusion of the essential contribution of nuclear power, ineffectively disguised by the claim that the option is "being kept open"—those magic words. The actions of government over the past eight years have been of neglect, delay and downright hostility, all of which must be brought to an end. The problem is much too serious to be decided by ill-informed prejudice. I claim some experience of this subject and I plead for a return to the leadership which any government owes to the nation on such issues.
	I fear that the Minister will attempt to brush aside the points I have made, but I ask him at least to drop his customary references to "market forces", which are nullified in practice by government intervention and bias. What we have is, at best, a highly directed market designed to promote an irrational policy. This cannot go on.

Lord Moynihan: My Lords, as a former Minister of Energy in two Conservative governments, with the honour of being the first chairman of the Government's Renewable Energy Advisory Group, I worked with a strong team of officials to launch the first major policy by a British Government to support the development of renewable energy technology; namely, the non-fossil fuel obligation.
	As to declaring my interests, I am a patron of the British Wind Energy Association and a director of Clipper Windpower plc—a company which, for the record, has neither developed wind farms in the UK nor sold turbines into the UK market. I am also a director of the Rowan Drilling Group of Companies.
	I am a long-standing supporter of government policies geared to support renewable energy and a lifelong believer in the importance of cleaner energy sources, from the expansion of natural gas in contrast to oil and coal-fired power generation to the development of policies to promote low-cost renewable energy technology. I am also a proponent of new build nuclear plants once the issues of cost, decommissioning and safe waste disposal are satisfactorily resolved.
	However, let us be under no illusion. New build nuclear will at best come on stream between five and 10 years from now and new build nuclear is irrelevant to the immediate contribution renewable energy can make to our supply base. The debate between nuclear and renewable is, as the noble Lord, Lord Whitty, stated, redundant in the context of our 2010 energy goals. We will, however, need both in the long-term future energy supply base.
	The current supply base also demands attention. It will become increasingly over-exposed, as the noble Baroness, Lady Sharp, stated, to imported natural gas, an interconnector which can and does flow in both directions; to a European meteorological pattern which, on the whole, has bitterly cold spells on either side of the Channel simultaneously; and to an historic paucity of political priority given to the Norwegian dimension of our energy needs. With no gas storage of any significance and a desperately tight market, we can only pray that the next two winters, before significant new build LNG is landed at high cost into the UK, will be bereft of prolonged cold spells which will lead to brown outs. Such is the underestimated severity of the energy crisis we face. The immediate outlook is bleak, serious and demands high-level government preparation today.
	The report from the Science and Technology Committee which is being debated today is essential reading for all who share my concern that it is incumbent on government to recognise the vital importance of renewable energy to ensure security of energy supplies through diversity of supply. I congratulate the noble Lord, Lord Oxburgh, and his committee on their work—for their clarity, precision and the academic rigour of their report.
	The political dimension under consideration is clear and international in scope. International agreement is needed for coherent regulatory and policy frameworks to support market development, including removing barriers, the concept of internalising external costs for all energy sources and allowing fair competition. Governments must also tackle subsidies to conventional energy sources that are distorting many existing energy markets.
	Let me attempt to focus on a number of issues raised in the context of wind energy, rightly recognised by your Lordships as one of the principal technologies capable of providing a solution to our national renewable energy obligations—not above 10 per cent, not in low wind-speed countries such as Germany, not with 20 per cent, 22.5 per cent, 25 per cent load factors, but here in the United Kingdom. Through public awareness programmes and education, we need to dispel myths which for too long have taken their place at the high table of misinformation.
	One such issue which touches the morning paper nerve as I read the national press, is the much publicised question of the causes of bird fatalities. In 2002, Erickson et al wrote a study in the United States entitled Summary of anthropogenic causes of bird mortality. Out of every 10,000 premature bird fatalities, more than 5,500 die as a direct cause of the built environment—buildings and windows. Some 800 deaths are attributable to high-tension power lines, 700 to vehicles and less than one in 10,000 to wind turbines. More than 1,000 are due to the activities of the domestic cat. As strong a proponent as I am of bird life, it may be a little unwise of me to return home tonight and suggest to my children a policy advocating the removal of the family cat.
	While the onshore wind power market is expected to demonstrate substantial growth in the near term, my personal view is that the future for wind energy does not lie principally onshore. It is in the offshore market that the Government can and should take a global lead. It is offshore where consistent winds are found. It is offshore where the legitimate concerns of visual intrusion are minimised.
	The contribution of wind energy in the marine environment is far reaching. Just three 2.5 megawatt machines over a 30-year certified lifetime would generate sufficient electricity to substitute 1 million barrels of oil equivalent for power generation. Some 75 machines on the horizon would equate to a substantial oil discovery in the North Sea, with massive environmental savings.
	For me, what lies at the heart of the report is the joint recognition by the Government and the committee that continuing to reduce the costs of those technologies which are closest to market is of paramount importance. The challenge now, as it has been for 10 years, is technological and commercially driven. It is to drive down further the cost of energy; to design low wind-speed turbines which can operate commercially in lower wind-speed areas; to increase exponentially the geographical capture of the wind resource through a new generation of turbine.
	There are many who believe that scaling mechanical items in wind turbine design has reached design limits; that once you scale up from a 1.5 megawatt machine, the cost curve will increase. In recent years, there have been few technological breakthroughs in the industry. Companies have, not unwisely, followed the alternative route and scaled up to achieve improved margins and profitability. But to tackle the offshore challenge and build turbines in the 4.5 to 7 megawatt range and higher, the industry will need to address the all-pervasive challenge of low rpm and high torque putting extreme structural stress on the gearbox and bearings. Efficiency, reliability and durability will be the hallmarks of the next generation of machines capable of reducing the cost of energy. With two thirds of the projected growth of annual European wind power deployment predicted to come from offshore over the next five or more years, the Government's focus should be on continued co-operation with the industry—not just to marinise land-based turbines but to roll out a new generation of fit-for-purpose, low cost of energy marine wind turbines.
	The DTI's technology programme reaffirms the commitment to support businesses investing in new and emerging technologies. That is welcome. Offshore wind turbines appear to fit this programme well, but were, sadly, omitted as being a priority by the Technology Strategy Board, and I would welcome the Government revisiting this omission.
	It is my belief that the UK is best suited to lead the offshore wind technology challenge world wide. The Government start from a position of being genuinely committed to the challenge. The senior civil servants working for Joan MacNaughton number among the most respected in the sector world wide. Our R&D support is being strengthened. We have a legacy of proven expertise in the oil and gas supply and service sector, and of supporting a high UK content in offshore wind technology. When I was Minister for Energy in 1990, a typical onshore wind turbine would generate electricity at a cost in excess of 7p per kilowatt hour, assuming a 20-year life, 7.5 metres-per-second wind speed at hub height, and a 15 per cent required rate of return. Now the sector is capable of operating at 3.5p/kWh onshore. To see that sort of technological and commercial development, Exxon would indeed be proud.

Baroness Miller of Chilthorne Domer: My Lords, it has been enormously interesting to hear a description of a possible framework for a future to which Britain could look with enthusiasm. But we have heard also a great deal about the currently enormous waste in the energy sector. Those were the two themes that ran through the contributions this afternoon.
	It is a privilege for me to be able to take part in a debate to which so many eminent contributions were made, not least the opening contributions of the noble Lord, Lord Oxburgh, and the right reverend Prelate the Bishop of Liverpool. I was struck by the great emphasis that both placed on the urgent necessity to create the right framework for large-scale investment in our energy future, and not only because it would be good for Britain. I believe that all the captains of British industry agree on that. In May, there was a very interesting programme on the BBC about the possibility of the UK missing the Kyoto target. It well made the point that Britain could become a world leader in low-carbon technology if the Government supported long-term policies to combat climate change. We could have exportable technologies that would be very good for our balance of payments and technology base.
	The right reverend Prelate the Bishop of Liverpool also painted a good picture of why pursuing this route would be not only in our own interests but, more importantly, in those of the world. The impact of climate change will be felt not only by us, but, to a much greater degree, by the world's poorest countries, where it will be unimaginable.
	I was very heartened to hear in advance of this debate a report from the US on the Senate's debate on climate change, led by Senators McCain and Lieberman. They initiated it in an effort to change opinion, both in the US Senate and in the US generally. The change of heart that is beginning to take place in the Senate, led by those two Senators in particular, is extremely encouraging. It is a very good base on which to build as we move into the G8 summit. I hope that the Prime Minister will be able to build on it as well. So many positive comments were made in that debate.
	Also in advance of this debate, I was pleased to hear that Malcolm Wicks, Minister with responsibility for energy, is launching a consultation on micro generation and its place in the UK's energy future. My noble friend Lord Ezra has for years promoted the idea of micro generation and quite rightly so.
	All parties in the House seemed to share a sense of frustration, so well expressed by the noble Lord, Lord Whitty, that although many of the technologies are in place, progress has been much slower than we would have liked. So often when we raise an issue in this House—for example, tidal power, which has been mentioned several times this afternoon—the reply has been, "Well, it's too expensive at the moment. There are environmental considerations". Of course there are environmental considerations, but we have to pilot these ideas and get round some of these problems.
	Several noble Lords, including my noble friend Lord Methuen, spoke well about the possibilities of tidal power. The noble Baroness, Lady Platt, made the point that it is a very predictable technology. Living as I do on the edge of the Severn Estuary, I would say that it certainly is. But the private investors to which the noble Lord, Lord Oxburgh, referred, need that policy encouragement from government before they are willing to invest in that sort of technology, which is still commercially risky. At a time when the Government have seemed to prevaricate in their attitude, the atmosphere of uncertainty does not bring forward any private finance.
	The other theme that ran very strongly through this afternoon's speeches was that of waste. The noble Lord, Lord Cameron, talked about waste energy—which was a different form of the waste issue but a very important one to consider. It is almost incredible that we still landfill as much as we do, when you consider that that is a possibility. In saying that, I am aware that my own party's policy is not at the moment in favour of incineration—so I am expressing a private view. But I believe that it is something that we must consider in future.
	Noble Lords also contributed on the issue of waste, explaining the waste that happens as we transmit electricity over long distances. I was very struck, back in 2004, when the DTI published its UK Energy in Brief information, which included a pie chart that showed losses of the UK's energy mix run at 33 per cent. If only we could start to capture some of that which is lost—and the noble Lord, Lord Dixon-Smith, referred to the loss of heat from power stations—we would be a considerable way towards closing the energy gap to which many noble Lords referred.
	Addressing wastage is a crucial part of what we must do. That point was highlighted by a question from my honourable friend Norman Baker on the theme of "Stand-by Britain", highlighted today in the Independent. He was talking about the sort of loss that occurs because we are all careless about how we use energy at the moment—leaving our TVs and washing machines and every possible appliance on stand by. I believe that it is for the Government to try to change behaviour through information campaigns, but it is also for them to help industry to look at designs for intelligent appliances that turn themselves off unless they are instructed to be on stand by. How can it be that every year we commit to the atmosphere 1 million tonnes of carbon because of being "Stand-by Britain"? That is disgraceful.
	In the few minutes left to me, I turn to one particular part of the report that was especially interesting. I thought that the entire report was interesting, but this is a part that I should like to ask a question about. I refer to the current lack of support for community-based and smaller-scale projects. Paragraph 98 of the government response says that the Government share the Committee's desire to ensure that community-based and smaller-scale projects are supported, and they say that they are developing a micro generation strategy, but the timescale is fairly short before the community renewables initiative is due to finish in March 2006.
	At the moment, many communities have the will to develop a range of renewables strategies, but they lack the advice on how to do it. There are very few readily available advisers that a parish, town or district council can turn to. But more than that, they lack the ability to raise the sort of finance that they might be interested in investing. I put it to the Minister that one possibility would be to have a form of community grant guarantee, similar to that brought in as export credit guarantees. We could have community energy guarantees. It would not be a case of a community asking for a grant; it would raise its own finance and invest the money. However, it needs some form of guarantee before approaching the market to raise the money. There is an enormous future in tying in different kinds of generation such as wind power or tidal power to local communities. In that way some of the objections that have been raised could be overcome.
	In conclusion, the report of the committee of the noble Lord, Lord Oxburgh, contains many useful pointers to the way forward. Communities would very much welcome a government response on the matter that we are discussing.

Baroness Miller of Hendon: My Lords, like other noble Lords I thank the noble Lord, Lord Oxburgh, and the right reverend Prelate the Bishop of Liverpool for the excellent way in which they spoke to their respective Motions. The noble Lord, Lord Oxburgh, discussed the report produced by the Select Committee. The right reverend Prelate in the main discussed energy efficiency but also mentioned renewable energy. It clearly makes sense to debate both Motions together. Their concurrent interest in energy subjects is symptomatic of the concerns of many Members of your Lordships' House. Those concerns have been expressed in many previous debates and Questions. Indeed, many experts are speaking in today's debate.
	This is not a party political matter. Concerns have been expressed by noble Lords on all sides of the Chamber. Indeed, the two Motions that we are discussing were initiated respectively by a Cross-Bencher and a Member of the Bishops' Benches.
	I am sorry to say that the Government's responses to previous debates seemed to be rather optimistic. I hope that we shall consider that the Minister's reply to the debate today will indicate that the Government will deal with these matters. That is not a political point as noble Lords from all sides of the House have mentioned it.
	The excellent report of the committee of the noble Lord, Lord Oxburgh, is worthwhile in that it highlights the problems and the effectiveness, or otherwise, of the solutions that the Government support.
	The committee rightly discusses wind power which plays a major part in the Government's plans for renewables. However, as the committee points out, apart from the environmental problems on land and the differing ones for offshore installations, the major problem is the fact that wind blows only intermittently. My noble friends Lord Jenkin and Lady Platt emphasised that point. As the report says, that means that there will have to be a conventional generating capacity as a standby for those times when the wind does not blow, which will be expensive. Alternatively, there could be an agreement with some users to accept a possibly interrupted service, which would permit them to pay a lower tariff.
	The Energy White Paper, Our energy future—creating a low carbon economy, set the scene for the Energy Act 2004, the report that we are discussing and the problems to which the right reverend Prelate referred. There is no doubt that the aim of the policy was to ensure security of supply together with low carbon emissions. Not having low carbon emissions results in the real problem of climate change, which the right reverend Prelate discussed. The debate ever since has concerned how we can achieve those two objectives.
	The report was not able to consider the nuclear option. I was very interested to hear what the noble Lord, Lord Tombs, said on the subject. It is clear from the report that although many kinds of renewable energy are being considered, the Government are placing most of their hopes on wind power for the replacement of nuclear power. However, what is not generally appreciated is that the intermittency factor means that wind power can never be a consistent and basic source of electrical supply. I suggest that all it can do is to enable replacement of more conventional fuels at favourable times; in other words, when the wind blows you may be able to close down a gas-fired station for a few hours.
	Biomass is another renewable that receives the attention of the committee under the attention-getting headline "Chicken litter vs chicken feathers". The committee points out that the generating plant must be situated close to the source of the fuel, otherwise the CO2 emitted by the lorries transporting it around the country would absorb a significant proportion of the savings that the process is supposed to make. While producing crops that can be burned for fuel may produce welcome income for farmers, the local communities are unlikely to welcome the erection of a power plant in the rural area.
	The committee came to the conclusion that the Government's projections for biomass as a contribution to our energy needs are perhaps over-optimistic. The Government response claims that between 5 per cent and 6 per cent of UK energy demand in 2020 could be generated from that source. Unfortunately, the response simply does not answer the committee's question—how realistic are the projections? I define the questions more specifically. Who will plant the crops? Who will build the plants? Where, and at what cost? The Government admit:
	"Development of energy crops for energy generation is a difficult issue".
	Those of us who are used to Whitehall-speak know what that really means. Unfortunately the long grass, into which this concept is clearly being kicked, is not itself capable of being burned for fuel.
	On a personal note, I recall that my late father, who was a furniture manufacturer, had a problem disposing of large quantities of sawdust. He solved it by burning it in specially adapted boilers, saving both on his fuel bills and on the cost of having the waste hauled away. Unfortunately, it took a long time to recover the cost of the plant. However, with some help from the Treasury—which experience tells me is unlikely to be forthcoming—other businesses producing flammable waste could be encouraged to do the same.
	As the committee comments, climate and latitude limit the use of solar power as a significant contributor to our power needs. On another renewable source the committee says:
	"We do not believe that it is feasible for wave or tidal generation to contribute significantly to meeting the Government's 2010 target. However there is no technological barrier to tidal barrages making a significant contribution by 2020".
	The Government's response admits to,
	"High generation costs . . . that have little or no prospects of reduction".
	The Government also admit to the,
	"Significant impact on the local and regional environments".
	Time does not allow me to comment in much more detail on the committee's report, but it points out with unerring accuracy the practical problems of renewable energy technology, and we broadly concur with its conclusions.
	I turn to the equally cogent contribution by the right reverend Prelate the Bishop of Liverpool. As much as methods of generating electricity are essential to our economy and the well-being of the population, it is axiomatic in business that the first thing to do to make a profit is to stop losing or wasting money. Many noble Lords have spoken about the loss of power in conventional matters. The same principle applies to meeting simultaneously our energy needs and our Kyoto commitments. Energy efficiency can be encouraged by the Government not just by warm words but with practical help: for example, a reduction of VAT—so far as EU regulations allow a sovereign nation to do so—on materials and work used for conservation of energy or for energy-efficient plant. Also, a landlord's energy saving allowance would enable private landlords' relief on capital expenditure for installing loft and cavity wall insulation in rented accommodation.
	A major cause of CO2 emissions, as has been mentioned frequently this evening, is our beloved motorcar—despite the development of ever-more efficient vehicles that are counterbalanced by the fume-belching 4x4s. That is a particular form of nimbyism; there should be fewer cars on the road so that I can drive mine more easily. Increasing air traffic is an equal, if not even greater, cause of CO2 emissions and damage to the ozone layer. Something must be done about the number and frequency of cheap flights to all destinations; except for those to where I want to travel. That is the problem. The noble Lord, Lord Whitty, talked about better behaviour. The noble Lord, Lord Winston, mentioned how he goes around the country speaking on the issue. All that is good, but people are not listening at the moment.
	Although solar power has been largely dismissed as a factor in the renewables programme, as we have heard, it can make a small contribution to saving electricity. In Israel, many houses have solar batteries on their roofs. At least they heat the water. In New York, there is a landmark building that runs its lifts—its elevators—largely off the panels on its roof.
	It has been pointed out to me that this is a timed debate. I am well aware that if I do not sit down at the appropriate time, the Minister will not have time to make his contribution. I shall leave my final three pages because I could not get through them short of gobbling them up, which would mean that people would not be able to hear them. I think that most noble Lords would rather hear the noble Lord, Lord Sainsbury.

Lord Sainsbury of Turville: My Lords, I thank the noble Baroness for making that point, because I want to cover a lot of issues.
	The Government welcome the Science and Technology Committee's report on the practicalities of meeting the Government's environmental and renewable targets. I thank all speakers in the debate, particularly the right reverend Prelate the Bishop of Liverpool and the noble Lord, Lord Oxburgh, for their constructive contributions on energy efficiency and renewable energy. The report rightly challenged us on some key issues of our energy policies and gave us a lot to think about.
	We could debate many issues this evening, but I thought it would be most useful to concentrate my remarks not on the overall issue—I think we agree on that—but on where the Government and the committee have different viewpoints. First, I shall deal with the question of energy crops, a point raised by the noble Baroness, Lady Miller of Hendon. The committee considered that the Government's projections for the contribution of energy crops were overoptimistic. We have asked the consultants to re-examine the numbers, and it is clear that the committee's report is right. We will write to the committee to set out the position as we now see it.
	Next I shall take the question of the generating costs. The committee called on the Government to commission independent and authoritative research to provide comprehensive costs for generating technologies. The Government have properly published a number of major studies of different generating technology costs. Inevitably, they change as a result of many factors, including developments. However, we will look at the evolving work on the issue and keep generating costs under review.
	A small but important point raised by the report was on tidal lagoons. The committee urged the Government to publish the report on tidal lagoons, to promote greater public debate on the advantages and disadvantages of such schemes. The Government are persuaded by the merits of the committee's argument. We will undertake to review the available information and, if we can get the permission of the people who compiled it and on whom it was gathered, we will look at publishing the report so that people can see it. However, I should make it clear that there is no question of reconsidering the scheme. The figures in the report were clear that it was a highly expensive scheme. We feel that it makes no sense to invest in technologies when the costs remain extremely high. It must be sensible to invest in technologies when they begin to make some commercial sense.
	The noble Lord, Lord Oxburgh, raised an important question on priorities and the security of supply. The committee's report raised concerns about security of the UK's electricity supplies, which is an issue that invokes strong opinions. Noble Lords will be aware that the maintenance of secure energy supplies is a fundamental goal of the Government's energy policy, as we made clear in the energy White Paper. The committee would like it to be the main goal of our energy policy, but we believe that we should not give priority to any one goal. We wish to achieve all four goals set out in the White Paper. Noble Lords will also recognise that my right honourable friend the Secretary of State for Trade and Industry and the independent regulator Ofgem have statutory responsibility for ensuring the security of our electricity supplies.
	I totally agree with the noble Lord, Lord Oxburgh, that the lights cannot be allowed to go out. However, I cannot agree with his rather frivolous comment that you could let baked beans go out of supply in stores. Some of us regard that as an equally serious issue.
	Capacity margin is a further question. Your Lordships have expressed the view that the Government should prescribe a level for the capacity margin, technically defined as the proportion by which available generating capacity exceeds expected peak demand. We are not convinced that anything would be gained by the Government doing so. We believe that the key issue here is the market framework which the Government and Ofgem have put in place to ensure that market participants have every commercial incentive to make that calculation and to get it right.
	Under market rules, if an electricity or indeed a gas supplier finds himself unable to put into the national distribution networks as much as his customers take out, he faces severe financial penalties. Consultation is also now under way on a proposal to make those penalties even more onerous. That is a strong lever to ensure that market participants make sure they are able to provide the supplies for which they have contracted.
	It is clear that renewable energy has an important role to play in reducing carbon dioxide emissions and the committee expressed concern about the ability of industry to deliver the Government's target of 10 per cent of electricity supplies from renewable sources of energy by 2010. But there is now enough evidence of investors coming forward to enable us to achieve our targets, provided the barriers to renewables—that is, grid supply, capacity, planning issues and the barriers of the MoD—can be addressed in time. As has already been mentioned in the debate, the DTI has created a dedicated 2010 target team which is responsible for ensuring that the key barriers can be addressed. I can however assure the noble Lord, Lord Haworth, that there is no question of steamrolling the opponents. That is not the way of the British Civil Service.
	Recent successes include acceptance by the MoD of the recommendations of the Eskdalemuir study, which should enable objections to more than 1 gigawatt of renewable projects to be lifted. In addition, as the Government highlighted in their response to the committee, the National Audit Office report looked at our plans and concluded that the Government might well achieve 9.9 per cent of electricity supply from renewable sources of energy by 2010. That is very close to the 10 per cent target which I believe is attainable if we can remove the barriers. Last year was a record year for wind generation, with 240 megawatts being built. We expect to double that in 2005 and to see a continuing trend upwards, which means it is very likely that we can meet the target.
	I am particularly pleased that in the debate the noble Lord, Lord Haworth, made what is to me one of the key points. That is simply that if we run down nuclear by 2020, we will have certainly gone back on CO2 emissions over the first 20 years of the programme. There is no way in which we can achieve more than 20 per cent renewables by 2020. If at the same time we lose 25 per cent of nuclear energy over the first 20 years of the programme, we will have gone back on CO2 emissions. That is not a satisfactory position. That is why we must be looking at other ways of improving our performance. Also, as the noble Lord, Lord Methuen, rightly pointed out, it would leave us dependent probably on imported gas for 70 per cent of our needs. That, too, must be seen as a vulnerability. The extent of that vulnerability is to be debated, but that there is a vulnerability is unarguable.
	Noble Lords will be aware that the Government's main mechanism for supporting industry's delivery of a 10 per cent target is the renewables obligation. While the committee had concerns that the obligation would act as a cap on renewables because of the potential cliff-edge on renewable obligation certificates, the Government have been addressing this issue in the context of the review of the obligation. We expect to publish the statutory consultation paper on the review of the 2005 renewables obligation in September in concluding our proposals on future levels of the obligation. The noble Lord, Lord Oxburgh, raised a new version of the scheme, which we will certainly consider.
	I shall briefly describe what the Government are doing on energy efficiency. The right reverend Prelate the Bishop of Liverpool will see that we are doing a great deal. He implied that we are doing very little but, in fact, we have a very substantial programme. The bill for supporting renewables will soon run at about £1 billion. That is a sign of the great commitment of the Government to renewables. Of course, research, which we are ramping up, is only one of the costs. We should also bear in mind the very substantial investment—the key investment—which is being put in by the private sector; Centrica plans, for example, to invest £750 million in renewables.
	We also recognise that increased energy efficiency must make an important contribution if we are to achieve our energy policy goals. The energy White Paper made it clear that energy efficiency is likely to be the cheapest and safest way of addressing all four of our energy policy objectives. The Energy Efficiency Action Plan, published in April 2004, estimated that annual carbon savings of 12 million tonnes could be made by 2010, and suggested that energy efficiency could contribute around half of the additional 15 million to 20 million tonnes of carbon savings likely to be needed by 2020. The action plan set out and described a challenging set of detailed policies and measures to improve energy efficiency to an unprecedented level across the economy.
	Through the EU Emissions Trading Scheme, climate change agreements, climate change levy, and other targeted tax allowances, including those for combined heat and power, our most energy intensive industries and the power generation sector have strong incentives to reduce their emissions in the most cost-effective way. We are working in partnership with business to deliver the 8 million tonnes of carbon savings by 2010 that were targeted from that sector.
	In the household sector, building regulations and the energy efficiency commitment are leading the way, as part of a broader package of polices, to improve residential energy efficiency. There has already been significant progress: for example, improvements in the housing stock between 1997 and 2001 have resulted in annual carbon savings of 1.7 million tonnes. In 2002, through the building regulations, we raised the minimum standard for the energy performance of new buildings by 25 per cent. By the end of this year, we aim to raise the standard again with the introduction of a further revision to the building regulations and the implementation of the EU energy performance of buildings directive.
	We have not been idle since publishing the Energy Efficiency Action Plan. It has been reinforced by further measures and commitments, including ongoing work to encourage innovation in building design and construction through a code for sustainable buildings, which, from April 2006, will be a requirement on all new homes funded by government or their agencies, including through relevant public/private partnerships; an additional £10 million for the community energy programme, which is helping to overcome the barriers to and encouraging the uptake of community heating schemes across the UK; an additional £10 million to the Energy Saving Trust to support the development of its new sustainable energy network, which will provide advice and promote the take-up of sustainable and efficient use of energy in the home; increased funding to the Carbon Trust to ramp up their work with business on delivering a low-carbon economy; a £12 million climate change communication initiative to change public attitudes to climate change; and a £20 million fund to support technological innovation in energy efficiency.
	I now turn to a number of specific points raised by noble Lords during the debate. The noble Lord, Lord Oxburgh, raised the issue of bioethanol and my noble friend Lord Whitty mentioned the transport dimension. The Department for Transport is taking forward work on a biofuels strategy to deliver carbon savings in the transport sector. Among the options being considered is a road transport fuel obligation which could promote the use of biodiesel and bioethanol for transport.
	The noble Earl, Lord Selborne, raised the difficulties of biomass. I remind noble Lords again that Sir Ben Gill is leading the Biomass Task Force which, in its one-year study, will seek to stimulate biomass supply and demand in a bid to help to meet renewable energy targets and to boost farming, forestry and the rural economy. The task force is expected to submit a final report to the Government in the autumn. If there is anyone who is suitable to take on all the bureaucratic rules that inevitably surround these schemes, it is Sir Ben Gill, who has the right experience to do that.
	The noble Baroness, Lady Sharp, asked whether with wind power we are putting all our eggs in one basket. The answer is that, at the moment, it is the one source of renewable energy that makes commercial sense to invest in. At this point, we should be putting most of our efforts on renewables into wind power. As far as research is concerned, there are a number of other technologies in which we ought to invest in demonstrators and research. However, to put money into them at a stage when, in many cases, they are way out of court as far as commercial considerations are concerned would be an obvious mistake.
	The noble Lords, Lord Jenkin and Lord Chorley, raised the question of the intermittency of wind power. We accept that intermittency must be managed, but surplus capacity has to be maintained because of plant failure. That applies to all technologies. As the noble Lord said, the 2010 target can be met with limited changes to the operation of the grid. In the longer term, the geographical dispersal of wind farms, shifts to more farms offshore where there is greater wind. The development of storage techniques and demand management should help to deal with the problem.
	The noble Lord, Lord Whitty, raised the question of the machinery of government. This issue always comes up. I think that we should not keep changing the structure of government and should make certain that the processes work.
	The noble Lord, Lord Cameron of Dillington, raised the issue of energy from waste. The Government recognise the benefits of energy derived from waste. Indeed, it is an issue covered by the review of the renewables obligation.
	The noble Lord, Lord Winston, made the point that we need the participation of the public. I think that there is not quite as much growing distrust of technology as he implied. There is a growing understanding that many of our environmental problems will be solved only by science, technology and innovation. But I entirely agree with him that we need to bring the public into this debate. We have a series of schemes under the Sciencewise project, which is developing public participation. We will make certain that the public will be able to participate fully in the energy debate in the next couple of years.
	Despite what the noble Lord, Lord Tombs, said, I do not think that we are showing a lack of leadership on this subject. As the right reverend Prelate the Bishop of Liverpool made clear, this is a major issue. It is not a quixotic gesture to put extra funds into this area. We need to look at all sources of energy, including nuclear, on the basis of what they can contribute to our three goals, and not take any of them believing that it can solve the whole problem.
	The noble Lord, Lord Moynihan, raised some important questions. I think that he is wrong to feel that there is a crisis and that we might run out of energy. As one can see from this debate, it is not a question of running out of energy. If we do not go ahead on nuclear, or if we do not reach our targets on renewables, we will see what we are seeing at the moment. The generators will go on building on the basis of energy from coal and gas, and we will see, as we saw in 2003, emissions go up because of the way that the generators solve the problem.
	Finally, I thank noble Lords for an interesting debate on the future of the UK's energy policy, and particularly on energy efficiency and renewable sources of energy. The report by the Science and Technology Select Committee and the debate today have provided much food for thought. I know that my honourable friend the Minister with responsibility for energy will reflect long and hard on the views expressed by your Lordships.

Lord Oxburgh: My Lords, we have had a good debate today. I begin by thanking the Minister for his detailed and informative reply, and, indeed, for sharing with us a considerable amount of the Government's forward thinking in this important area. I have to say that I gained considerable encouragement from it.
	I also thank noble Lords for their gracious reception of our report. I hope that our two specialist advisers, who are with us today, Professors Anderson and Elliott, and, indeed, our clerk will feel that their efforts in supporting us were worth while. We certainly had some excellent and vigorous discussions among the group in trying to sort out the complexities and the subtleties of the ROC system and other aspects of renewable energy and its support.
	The most encouraging thing that I have heard today is the unanimous agreement that we have a major challenge in coping with atmospheric CO2 and climate change. I have not heard that questioned; that is enormously encouraging. The issue is urgent. Now the question is: what are we going to do about it? The Government have made a start. But this is where—traditionally in this country—the system has broken down. We have had good ideas, we have had committees and good recommendations, but then we have fallen down on the implementation.

Baroness Farrington of Ribbleton: My Lords, I intend absolutely no discourtesy to the noble Lord, Lord Oxburgh. Unfortunately, because earlier speakers took longer than the allocated time, we are now two minutes over time. I apologise most sincerely to the noble Lord and hope that in future all noble Lords in a timed debate will be as helpful as possible. My noble friend the Minister lost two minutes of his reply time because of other noble Lords speaking at length.

Lord Oxburgh: My Lords, I thank the noble Baroness. I shall be as brief as I possibly can, but there are a few things that have to be said.

Lord Brabazon of Tara: My Lords, I must now put the Question. The Question is that this Motion be agreed to. As many of that opinion will say "Content"? To the contrary "Not Content"? The "Contents" have it.

On Question, Motion agreed to.

Renewable Energy

The Lord Bishop of Liverpool: had given notice of his intention to call attention to the Government's strategy and timetable for programmes of energy efficiency, use reduction and conservation and for the implementation of renewable sources of energy; and to move for Papers.
	Motion not moved.
	House adjourned at twenty-eight minutes past six o'clock.